Japanese Tech Stock Weekly Summary (May 18 - May 24, 2009)

The following is excerpted from IRG's weekly stock report:

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Hardware

• Panasonic Corp.'s (PC) mobile phone handset-making unit is considering developing a handset that uses Google's (GOOG) Android operating system and re-entering overseas markets in or after the fiscal year starting April 2010. In Japan, NTT DoCoMo (DCM) plans to sell handsets using the Android operating system as early as next month to compete with Apple Inc.'s (AAPL) iPhone offered by Softbank. The DoCoMo handset, equipped with a touch screen, is priced between 25,000 yen (US$263.7) and 30,000 yen (US$316.5) with the company's two-year installment plan.

• Sharp Corp. (SHCAY.PK) is considering selling mobile phone handsets in Brazil as early as next year. It would be the first time for a Japanese maker to sell handsets in South America. Sharp aims to boost its overseas sales of cellphone handsets 2.5 times to 4 million units in the current fiscal year. As Brazil has terrestrial digital TV broadcasting similar to the Japanese system, Sharp plans to sell handset models capable of receiving TV programs.

• Hitachi Global Storage Technologies (Hitachi GST) (HIT) announced that it has agreed to acquire a substrate manufacturing facility located in Sarawak, Malaysia from Western Digital (WDC). The facility currently produces aluminum substrates used in hard disk drives. WD originally acquired the Sarawak facility through its purchase of Komag in 2007. The Sarawak facility is located in close proximity to existing Hitachi GST suppliers and drive assembly operations, which will enable us to realize increased operational efficiencies and other long-term benefits.

• Toshiba (TOSBF.PK) has announced plans to end production of mobile phones in Japan and outsource some output to overseas manufacturers in a bid to cut costs as demand slumps. Toshiba's Hino Operations mobile phone production facility will outsource manufacturing to overseas manufacturers from October 2009 when it will focus on product control, support and repair, and service activities, as well as product development and design. It said approximately 200 employees engaged in mobile phone production at Hino will be reassigned within the group. The move is expected to reduce annual fixed costs by 4.5 billion yen (US$47 million). Toshiba's mobile phone unit recently reported its first annual operating loss in five years after sales halved compared to the previous year.

Semiconductor

• The book-to-bill ratio for Japanese chip-making equipment rose for the first time in nine months, industry data showed, with orders up in April for a second straight month. In the latest sign of a bottoming-out in the semiconductor sector, orders for tools used to make microchips rose 25 percent from the previous month to 25.8 billion yen (US$272 million). But the extrapolated April orders would still be down 68 percent from a year earlier.

Software

• McAfee (MFE) has appointed Masanori Osuga as president of the company's Japanese operations. Osuga will be responsible for sales across McAfee's consumer and enterprise segments. Prior to joining McAfee, he was country manager and vice president of Juniper Networks' Japanese arm. Before that he was Japan country manager at Unisphere Networks, which was acquired by Juniper Networks in 2002. He also held positions at AT&T Japan and NEC.