Semiconductors

• Elpida Memory Inc.’s (ELPDF.PK) venture with Taiwan's Powerchip Semiconductor Corp turned profitable in July-September on rising prices of DRAM. Taiwan firm Rexchip Electronics Corp, 52 percent owned by Elpida, has operating and net profits in five quarters as dynamic random-access memory prices declined 80 percent in 2008 in a battered chip sector. If the current recovery in chip prices continues, its profit will become more substantial. Elpida’s Tera Probe turned profitable in the quarter just ended, due to increase in demand for testing of mobile DRAM used in smartphones. Other investors in Tera Probe include Taiwan's Powertech Technology Inc, U.S. module maker Kingston Technology Co and Japanese tester maker Advantest Corp.

Hardware

• Sony Corp.’s (SNE) PlayStation 3 video game console’s weekly sales jumped to a record in Japan following the introduction of a slimmer, cheaper model. The new PlayStation 3 sold 150,252 units. Sony cut the price of the PS3 in Japan by 25 percent to 29,980 yen (US$323) with similar reductions worldwide and introduced a model that is one-third the size of the original and consumes 34 percent less power. Microsoft (MSFT) followed with a US$100 reduction for its most expensive Xbox 360 player to US$300. Nintendo (NTDOY.PK) kept the price of the Wii at US$250.

Hardware

• Sony Corp. (SNE) cut the price of its PlayStation 3 console by 25 percent, bowing to demands from game publishers and increasing the pressure on industry leader Nintendo (NTDOY.PK) to follow. PlayStation 3's price will be US$299 in the U.S., with comparable reductions in Europe and Japan. Nintendo offers the Wii for US$250 and Microsoft Corp (MSFT) sells its Xbox 360 machine for as little as US$200. Sony chairman Howard Stringer, who rebuffed calls for cheaper prices as recently as last month, reversed course after PS3 sales tumbled to a two-year low. Sales of Nintendo's market-leading Wii dropped for the first time last quarter as the global recession drove down consumer spending.

Hardware

• Kyocera Mita Corp. (KYO) entered into a share purchase agreement with Chungho Comnet Co., Ltd. to acquire all outstanding shares of the two document equipment distribution subsidiaries of Chungho, Chungho OAsys Co., Ltd. and Chungho Document Solution Co., Ltd. By acquiring these two companies as its own sales subsidiaries, Kyocera will be able to drastically enhance its sales activities in Korea which Kyocera has placed as one of its strategic countries in Asia and also strengthen its sales capabilities in Asia together with the Chinese and Indian markets.
• Canon Inc. (CAJ) raised its group operating profit forecast by 10 billion yen (US$105.8 million). The upgrade is attributed in part to cost reductions, mainly in advertising and R&D, that are expected to result in 220 billion yen (US$2.3 billion) savings a year roughly 50 billion yen (US$528 million) more than its earlier target. With its office equipment business in the doldrums, however, overall sales are expected to drop 22 percent. The company plans to release next-generation copy machines in the second half of the year. But despite stepped-up marketing efforts in North America, a recovery in the copier business will take time as companies cut back on expenses, such as spending on color copies.
• Sony Corp. (SNE) posted a smaller-than-expected quarterly loss, helped by an improvement in its struggling flat TV business, and said it was aiming to beat its official forecast and at least break even for the full year. Sony has fallen behind Apple's iPod in portable music, Nintendo in videogames, and is struggling to compete with Samsung Electronics in LCD TVs. But the company, which competes with Panasonic for the position of the world's largest consumer electronics maker, said that losses on flat TVs had narrowed in the latest quarter, bringing the business close to the break even level. The maker of Bravia flat TVs and Vaio PCs kept its operating loss forecast of 110 billion yen (US$1.2 billion) for the year to March 31, 2010.
• Nintendo Co. (NTDOY.PK) and Sony Corp. are facing mounting pressure to cut prices after sales of the motion-sensing Wii fell for the first time and PlayStation 3 shipments tumbled to a two-year low. Nintendo shares fell the most in three months after the Kyoto-based company said Wii sales plunged 57 percent and profit dropped 61 percent. Sony reported a second straight loss after PlayStation 3 shipments fell 31 percent. Microsoft Corp. said last week it sold 1.2 million Xbox 360 consoles in its latest quarter, the lowest in two years. Sony Chief Executive Officer Howard Stringer and Nintendo President Satoru Iwata have spurned calls by game publishers and retailers to cut prices as the global recession drives down consumer spending. The stronger yen is also eroding earnings at Japanese electronics makers, making them less competitive relative to overseas rivals such as Samsung Electronics Co.
• Hitachi (HIT) plans to absorb five listed units, as the loss-making conglomerate tries to pool its sprawling resources to turn a profit. The news and hope that this would prelude further consolidation lifted shares of the Japanese maker of industrial electronics along with its subsidiaries. Hitachi will launch tender offers as early as next month to buy the shares it doesn't already own in Hitachi Maxell, Hitachi Plant Technologies Ltd., Hitachi Information Systems Ltd., Hitachi Software Engineering Co. and Hitachi Systems & Services Ltd. The move could cost Hitachi up to 300 billion yen (US$3.2 billion), including a premium on the units' share price.
• Hitachi Ltd. has plans to merge a pair of system-related subsidiaries this October in a bid to strengthen its system development business. Hitachi Electronics Services Co. will absorb Hitachi HBM Co. on Oct. 1 and become the surviving entity. All of Hitachi HBM's employees are slated to transfer to the merged firm. Hitachi Electronics Services handles system maintenance for the Hitachi group and also supports the introduction of information technology equipment at small and midsize businesses. By merging it with Hitachi HBM, which has expertise in system building, the aim is to enhance customer convenience through one-stop service. Hitachi Electronics Services turned three of Hitachi's system development units into consolidated subsidiaries, further strengthening its ability to propose systems to small businesses. The merger is expected to result in such synergies as subcontracting system development work from maintenance customers. Hitachi HBM was spun off in 1984 in order to expand sales in the office computer sales division.
• Fujitsu Ltd. (FJTSY.PK) will aim to strongly boost its profits to record-highs in fiscal 2011 through March 2012 by expanding its overseas sales and restructuring its operations. The company said it is anticipating a record group operating profit of 250 billion yen (US$2.6 billion) on sales of 5 trillion yen (US$52.8 billion), unveiling an aggressive midterm target for the next three years. Its net profit is also expected to reach a record 130 billion yen (US$1.4 billion) in fiscal 2011 in what would be a dramatic turnaround from a group net loss of 112.4 billion yen (US$1.2 billion) logged during the business year that ended in March. Businesses are likely to hit bottom during the current business year, adding Fujitsu will aim to raise its operating profit to 200 billion yen (US$2.1 billion) by fiscal 2010 thanks partly to the sale of its hard disk drive businesses to Toshiba Corp. (TOSBF.PK) and Showa Denko K.

Mobile/ Wireless

• Dena plans to buy a majority stake in the operator of a Chinese mobile social networking site, the Nikkei reports. Dena plans to buy more than 50 percent in UK firm Waptx, which operates China's largest mobile social networking site with a local partner. Dena will buy 8.73 million shares in the company through a private placement. Dena plans to use the portal site's content and expertise to expand its own social networking business. Dena already operates a mobile social networking site in China, but has less than 1 million subscribers while the Waptx service has about 9 million users.

Telecommunications

• NTT DoCoMo Inc. (DCM) reported fiscal first quarter results with 15 percent decline in its net profit to 147.4 billion yen (US$1.55 billion) from 173.5 billion yen (US$1.66 billion) given increased competition led to lower income from voice charges. Revenue dropped 7.3 percent to 1.08 trillion yen (US$11.4 billion), from 1.17 trillion yen (US$11.2 billion). The company maintained its forecast for the current fiscal year through March 2010, with revenues of 4.38 trillion yen (US$41.1 billion) and an operating profit of 830 billion yen (US$8.7 billion).
• Softbank Corp. (SFBTF.PK) enjoyed gains on increased service fees and handset sales. The company said its net profit jumped 41 percent in the fiscal first quarter to 27.38 billion yen (US$287.9 million) from 19.37 billion yen (US$185.2 million) in the same period a year earlier as increased revenue from both usage fees and handset sales boosted its mobile phone operations. It was much better than a consensus projection for a 11.2 billion yen (US$117.8 million) profit compiled by data provider Thomson Reuters from a survey of 13 analysts. Operating profit climbed 27 percent to a record 108.3 billion yen (US$1.14 billion) from 85.09 billion yen (US$0.81 billion) a year earlier with profit from the company's core mobile communication operations rose 36 percent. Broadband and infrastructure operations were also strong, with profit rising 33 percent. Revenue for the same quarter rose 2.9 percent to 666.33 billion yen (US$7.0 billion) from 647.26 billion yen (US$6.2 billion). Softbank's net profit for the April-June quarter jumped 41%

Semiconductors

• Tokyo Electron reported a smaller-than-expected quarterly loss and raised its annual outlook as orders start to rise in the latest sign of a spreading recovery in the chip sector. Chip giants Intel Corp (INTC) and Samsung Electronics Co, which recently booked better-than-expected quarterly results, are looking to invest more in new generations of chips to cut costs and cement their lead in the industry. Although still weak, orders for machines to make faster semiconductors more than doubled from the previous quarter, prompting Tokyo Electron to narrow its operating loss forecast by 9.5 percent to 57 billion yen (US$598 million).
• Renesas Technology Corp. and NEC Electronics Corp. will delay their plan to reach a merger agreement for a month until the end of August. The accord will be postponed because due diligence over their global production and sales bases spanning across Asia, Europe and the U.S. is taking longer than initially anticipated. Although discussions are ongoing on the investment ratio of the three major shareholders, Renesas, owned 55 percent by Hitachi Ltd. and 45 percent by Mitsubishi Electric Corp., and NEC Electronics, a chip unit of NEC Corp., will still aim to integrate their operations by next April.

Internet

• Yahoo Japan Corp. (YHOO) said net profit grew 0.4 percent from a year earlier in the fiscal first quarter, buoyed by the increased use of online advertisements to target female consumers. The company’s net profit for the April-June period rose to 19.24 billion yen (US$203.2 million), and is in line with its forecast of between 19 billion yen (US$200.7 million) and 20.1 billion yen (US$212.4 million) in net profit for the period. Operating profit for the period rose to 34.26 billion yen (US$361.9 million). Group revenue rose 3.17 percent to 67.64 billion yen (US$0.71 billion) from 65.56 billion yen (US$0.69 billion).
• eAccess Ltd. (ECLTF.PK) likely made a group pretax profit of around 1.8 billion yen (US$18.9 million) in the April-June period thanks to the acquisition of ADSL service provider Acca Networks Co. and smaller losses in its cellular phone business. The results would mark the telecommunications service provider's first pretax profit for the April-June quarter in three years. Sales appear to have declined 11 percent about 21.5 billion yen (US$0.23 billion) as low-priced data cards accounted for a higher proportion of the company's overall cellular phone hardware sales. The sales figures are in line with eAccess' initial projections. Operating profit is believed to have soared 43 per cent to roughly 5 billion yen (US$52.8 million). The absorption of Acca Networks helped eAccess reduce sales and administrative costs by consolidating its ADSL operations. In addition, losses at cellular phone unit Emobile Ltd. likely shrank by some 2 billion yen, with a net subscriber increase of nearly 40 per cent, or 262,000, sharply pushing up revenue. Net profit probably came to around 300 million yen (US$3.2 million), compared with a 2.8 billion yen (US$26.6 million) net loss a year earlier.

Media, Gaming and Entertainment

• Tokyo Broadcasting System Holdings Inc. will make an initial payment of 40 billion yen (US$420.1 million) to Rakuten Inc. in response to the virtual mall operator's request for a buyback of its TBS shares. After the breakdown of initial talks, the two sides sought court mediation to determine a buyback price. If the negotiations drag on for years, then TBS which is required by law to pay the interest it will owe Rakuten on the shares could end up incurring a huge interest burden. By making the temporary payment, TBS aims to hold down interest expenses. The broadcaster will tap bank loans for the funds to be paid to Rakuten.

Korea

Telecommunications

• SK Telecom Co. (SKM) said its second-quarter net profit rose 4.6 percent to 311.6 billion won (US$250.7 million) in the three months ended June 30 from 298 billion won from a year earlier despite higher marketing costs, mainly due to a rise in subscribers. Sales rose 4.7% to 3.068 trillion won (US$2.47 billion) from 2.93 trillion won (US$2.36 billion) because of an increase in the number of subscribers, largely from its wireless Internet data service. The company also said its capital expenditure amounted to 667.4 billion won for the first half of this year, including 319 billion won (US$256.6 million) spent in the second quarter to secure more profitable third-generation mobile services and improve call quality.
• LG Telecom Ltd. reported its biggest profit decline in six quarters after the company boosted marketing spending to win customers from SK Telecom Co. and KT Corp. Second-quarter net income fell 43 percent to 38.3 billion won (US$30.8 million) from 67.6 billion won (US$54.4 million) a year earlier. Sales rose 5.7 percent to 1.33 trillion won (US$1.07 billion). LG Telecom and SK Telecom increased incentives to lure users before KT absorbed its wireless unit, KT Freetel Co., in June in a market where more than nine out of 10 people already own a mobile phone. South Korea’s communications regulator has said competition may ease in the second half after the three operators pledged this month to rein in marketing costs such as handset subsidies. LG Telecom accounted for 18 percent of the Korean mobile- phone market at the end of June, compared with SK Telecom’s 51 percent and KT’s 31 percent, according to government data.
• SK Telecom Co. will sell its entire 15.3 percent stake in Virgin Mobile USA Inc. to Sprint Nextel Corp. Sprint Nextel said it would acquire Virgin Mobile in a US$483 million stock-swap deal. Sprint already owns 13 percent of the U.S.-based wireless services operator, and will buy out major shareholders Virgin Group and SK Telecom. Lauren Kim, a spokeswoman at SK Telecom, said that the company's stake in Virgin Mobile would be diluted to below 1 percent from 15.3 percent following Sprint's acquisition of the mobile operator.

Semiconductors

• Samsung Electronics Co. said it plans to begin mass production of its latest and fastest chip model later this month. The company will begin production of its 2-gigabit DDR3 DRAM chip, based on its 40-nanometer technology, six months after it developed the world's first 40-nanometer chip. The company expects the new product will lower power consumption to 70 percent of that for 50-nanometer DRAM chips. A nanometer is one-billionth of a meter. The technology will also improve productivity by as much as 60 percent, as each DRAM chip will take up a smaller space on the production line. DRAM is a type of memory that stores each bit of data in a separate electronic component within a circuit. It is used in personal computers and other electronic devices such as mobile phones.
• South Korea's antitrust watchdog fined Qualcomm Inc. (QCOM) 260 billion won (US$208 million) for abusing its dominance in the local chipset market and ordered the global mobile chipmaker to end its "unfair" business practices. Qualcomm disagrees with the ruling and will appeal in a South Korean court against it. The fine imposed on the U.S.-based company was the largest ever levied against a single business by the Fair Trade Commission since it imposed a 113 billion won (US$90.6 million) fine on KT Corp. in 2005. The commission also ordered the U.S. chip maker to stop paying rebates to its customers and imposing higher royalties for those using chips supplied by its rivals. The company has offered discounts and incentives to customers for using its chips, which has contributed to the competitiveness of Korean handset makers.

Hardware

• LG Electronics Co. is posting some of its strongest growth ever and taking market share from cellphone rivals. LG last year passed Motorola (MOT) Inc. and Sony Ericsson to become the world's third-largest seller of cellphones, shipping just over 100 million units, or about 8.6 percent of the global 1.17 billion. This year, with the overall cellphone market expected to fall more than 10 percent, some analysts predict LG's cellphone shipments will rise between 10 percent to 20 percent. The division's growth is expected to help LG post a profit when it reports quarterly results at a time that many consumer-electronics companies are struggling with deep losses.
• Samsung Electro-Mechanics Co. said its second-quarter earnings rose nearly nine-fold from a year earlier on high demand for mobile handset and TV components. Samsung Electro-Mechanics earned 76.6 billion won (US$61.2 million) in the three months ended June 30, up 791 percent. Sales rose 27 percent on-year in the April-June period to 1.316 trillion won (US$1.06 billion) with operating profit rising more than five times to 128.9 billion won (US$103.7 million).

China

Internet

• Baidu (BIDU) expects its new online market platform to help boost revenue this quarter as more advertisers migrate to the new system. Net profit for the three months to June rose a better than expected 44.6 percent to US$56.1 million, with revenue up 36.7 percent to US$160.7 million. Baidu forecast revenue for third quarter would grow 15 to 18 percent to of US$184 million to US$189 million, topping the US$182 million expected by Wall Street, according to Thomson Reuters.. The company would increase staff this quarter to boost the sales team for Phoenix Nest as well as its research and development team. Phoenix Nest, similar to Google's Adwords service, will gradually replace Baidu Bidding Rank and help rebuild the company's reputation after the Bidding Rank platform was accused of promoting fake medicine products. The firm served 203,000 active customers in the second quarter, and revenue per online marketing customer was 5,400 yuan (US$790.1), up 22.7 percent from last year.
• Alibaba Group has forged a strategic long-term alliance with state-owned Bank of China Holdings to jointly pursue a range of e-commerce initiatives, including an online payment card, trust rating system and small-business financing. Jack Ma Yun, the chairman and chief executive of Alibaba, expected the partnership to directly benefit the small-business customers of the bank and the group's subsidiaries. These include online payments service Alipay.com, business-to-business e-commerce provider Alibaba.com, internet-based business-management software supplier Alisoft.com and Taobao.com, the country's largest consumer e-commerce provider.
• Alibaba.com Ltd. is embarking on a reorganization that will separate the management of its domestic and international marketplaces, and step up cooperation between sister company Taobao.com and its domestic marketplace operations. The separation of management will allow the domestic and international platforms to further differentiate their strategies and user interfaces, among other things. Alibaba.com will also establish two new divisions aimed at helping its small-to-medium enterprise customer base gain access to information technology and employees trained to handle e-commerce.
• Changyou.com Ltd. (CYOU) posted total revenues of US$66.6 million for the second quarter of 2009, 39 percent increase year on year and 8 percent increase quarter on quarter. Operating profit was US$39.5 million, up 42 percent from the period last year and 4 percent from the previous quarter. Operating margin was 59 percent, higher than 58 percent in Q2 2008 but lower than 61 percent in Q1 2009. Net income reached US$34.5 million, growing 9 percent year on year and 3 percent quarter on quarter.
• Sohu.com Inc. (SOHU) reported second-quarter profit that beat analysts’ estimates on higher revenue from Web advertising and online games. Second-quarter net income was US$30.9 million compared with US$40.2 million a year earlier and beat the median US$27.8 million of nine analyst estimates compiled by Bloomberg. The company’s sales increased 25 percent to US$127.1 million, exceeding its guidance. Sohu, which in April spun off unit Changyou.com Ltd. in a US$138 million share sale, is speeding up development of its Internet search engine and adding videos and blog sites to lure users as competition rises from companies including Sina, Baidu said revenue will rise to a record this quarter as the nation’s economic growth helps boost advertising sales.
• The number of internet users in China grew by 40 million in the first six months of the year to reach 338 million at the end of June, a figure higher than the entire population of the U.S.. The number of broadband connections rose by 10 million to 93.5 million in the first half. About 95 percent of townships were connected to the internet via broadband as of early June and 92.5 percent of all villages were equipped with telephone lines that connect to the internet. Third generation mobile phone technology is also expected to boost rural coverage.

Telecommunications

• The telecom industry's average price levels in China had declined 8.5 percent year on year in the first half of this year. The industry's growth begun accelerating, even though it's still at a low level, dampened by the financial crisis. In the first half, the industry's business volume totaled 1,224 billion yuan (US$179.1 billion), up 11.8 percent year on year. It also registered 417.1 billion yuan in business revenue, edging up 2.3 percent. In regional terms, the industry's development in western region was more pronounced than in central and eastern China. The industry's revenues decreased 0.3 percent in eastern China year on year, but rose 2.6 percent and nine percent, respectively, in the central and western regions.
• The number of newly-added phone users in China was 43.5 million in the first six months of this year. China had more than 1 billion telephone users by the end of June, boosted by the launch of the 3G network. In January, the country issued 3G licenses to the top three telecom operators, China Mobile Ltd (CHL) China Unicom (Hong Kong) Ltd (CHU) and China Telecom Corp Ltd (CHA). The top three telecom operators have invested 80 billion yuan (US$11.7 billion) in China's 3G network so far this year. The ministry estimated that the top three operators would invest 170 billion yuan (US$24.9 billion) in 3G network construction this year.
• Huawei Technologies said 3G mobile network sales in the first half exceeded total shipments last year on strong demand from emerging markets such as China and India. The company, which has emerged as one of the top equipment vendors in the global telecommunications market, is expected to gain market share in Europe with its newly launched multimode network solution, Lu Xingang. UBS global telecommunications equipment analyst Gareth Jenkins estimates global telecommunications capital expenditure will weaken this year and next, with total spending declining 2.7 percent this year and 6.5 percent next year.
• ZTE Corporation (ZTCOF.PK) has signed a cooperative agreement with the Japanese mobile operator Willcom to provide ZTE's 3G data card product MF633 to users in Japan. As the fourth largest mobile operator in Japan, Willcom is also the largest personal handyphone system operator in the country with 4.6 million users and great influence in the Japanese market. At the beginning of 2009, the two parties signed a memorandum of cooperation for Time Division Duplex technologies, including XGP, to implement close cooperation to boost market share in this industry.

Media, Entertainment and Gaming

• China's mobile game market size hits 520 million yuan (US$76.1 million) in the second quarter of this year, up 32.37 percent quarter on quarter. Revenues from China Mobile's charges on information reached 230 million yuan (US$33.7 million), increasing 21.3 percent quarter on quarter. The company's quarterly growth rates of information fees in the first half of this year were over 20 percent, versus the -0.06 percent average quarterly growth in 2008.China Mobile's new game operating platform contributed most of the growth in its information fees, which topped 67.86 million yuan (US$9.9 million) in the second quarter, accounting for 30 percent of the total, while the growth of the old one slackened continuously.
• Giant Interactive announced it will acquire 51 percent equity in Hangzhou-based Xuelang Software. Based on the acquisition, the 2.5D-view game Xiantu Online developed by Xuelang Software will join Giant's venture platform "Winning in Giant," while Giant invests 40 million yuan to promote the game through primary marketing activities. This comes as the fifth project housed under the "Winning in Giant" platform, which aims to provide free capital, management and other supports to talented online game R&D groups to fuel their online game development.
• Giant Interactive plans to start alpha testing of its in-house developed 3D MMORPG Long Hun. More than 20,000 gamers activated testing accounts for Giant's in-house developed 3D fantasy MMORPG King of the Kings 3 on July 7, the first day of second-round testing, and the game hit 10,430 concurrent players on the same day. King of the Kings 3 entered first-round alpha testing on March 2008.
• Shanda Games Limited (SDG) (SNDA) will participate in the development of online game KOF World. SDG had reached an agreement with SNK Playmore, a Japanese game developer, on their cooperation. KOF World is the online version of The King Of Fighters, the heavyweight game software developed by Playmore. SDG is licensed to operate the online game in Mainland China and several other countries.
• Perfect World (PWRD) has not excluded the possibility of licensing foreign MMORPGs; before, the company had always focused on operating in-house developed games. Perfect World hopes to offer players other entertainment services besides online games. Perfect World took a step toward differentiating its business by establishing literature site zongheng.com last September, and investing in a webgame company and entering the film and video field this year. Perfect World had acquired a Chengdu-based webgame company and planned to release ten to twenty webgames in 2009.

Hardware

• Kaifa, a part of China Electronic Corp. (CEC), would invest 50 million euros (US$71 million) in Finnish firm Elcoteq. The announcement came as Elcoteq, a supplier to firms including Nokia, posted an operating loss of 11.5 million euros (US$16.4 million) in the second quarter and sales more than halved to 436 million euros (US$619.9 million). The deal would make the Chinese company its largest shareholder with a stake of at least 30 percent. CEC has been Elcoteq's joint-venture partner in China since 2002. Elcoteq said the total size of the investment was dependent on it successfully restructuring its debt, with a final agreement expected to be signed in the third quarter. It was not immediately clear what stakes main owners Antti Piippo, Jorma Vanhanen and Henry Sjoman would keep.

Alternative Energy

• China plans to subsidize demonstrative photovoltaic (PV) projects in the following two to three years through a program called Golden Sun. Each province is permitted demonstrative PV projects with a total capacity of 20MW. The government will subsidize 50 percent of total investment in PV power generation systems and power transmission facilities in on-grid projects, and 70 percent for independent projects.
• JA Solar Holdings Co Ltd (JASO) has received US$90.8 million under two three-year term loans from the Export-Import Bank of China. The loans carry interest rates below the benchmark rate set by China's central bank. The loans will strengthen its balance sheet and allow greater flexibility for financial and business planning. JA Solar's announcement comes as funding for solar power and green technology is beginning to recover from a dramatic fall-off earlier this year caused by the global credit crisis.
• Trina Solar Ltd. (TSL) raised its estimates for second quarter photovoltaic (PV) module shipments and gross margin, citing a rebound in the global solar market and supportive government regulations. Trina also forecast second quarter net revenues in the range of US$148 million to US$152 million, representing a 12 percent to 15.1 percent increase from the previous quarter and a 25.6 percent to 27.5 percent drop from the year-ago period. The company expects second quarter PV module shipments to total 63-65MW. Trina issued module shipment guidance of 90-110MW for the third quarter of 2009 and reiterated full year expectations of 350-400MW. Gross margin was forecast at 26-28 percent, up from previous guidance of 18-20 percent; operating margin is expected to be 11.5 percent to 13.5 percent.
• Yingli Group (YGE) broke ground on its 6 billion yuan (US$878.1 million) Yingli Industry Park in Baoding, Hebei province. The park will include a 800MW per annum crystalline silicon solar cell project, with a completion date set for December 2010. After the project comes on-stream, Yingli will have a total annual crystalline silicon solar cell production capacity of 1,400MW, and will generate sales revenues of as much as 15 billion yuan (US$2.2 billion) per year.
• LDK Solar (LDK) expects to report a net loss of US$180 million to US$200 million in the second quarter of this year, which it attributed to the sliding market prices of wafers. The company increased its guidance to revenues of between US$225 million and US$235 million and wafer shipments between 230-240MW but anticipates a write-down of US$150 million to US$160 million. LDK's fourth quarter financial results included a US$216.7 million inventory write-down. The company later updated its FY08 and Q408 results to include an additional write-down of US$87.5 million and a US$12.3 million provision for unrecovered supplier prepayments.
• Suntech Power Holdings (STP) has entered into a strategic agreement with China Energy Conservation Investment Corp. (CECIC) to develop solar projects, including large-scale on-grid, urban building-integrated, rural off-grid, and wind-solar hybrid projects, over the next five years. CECIC plans to take charge of project investment and development under the partnership, while Suntech will supply solar products, system design and technical support. Suntech's previously announced projects in Qinghai, Shaanxi, and Jiangsu provinces, as well as Shizuishan, Ningxia province and Panzhihua, Sichuan province, may be developed through the collaboration.

Semiconductor

• SMIC announced the successful commercial production of a 130nm family of DisplayLink USB graphics chips designed by DisplayLink and manufactured at SMIC. These new products make it possible to easily connect additional monitors, and provide a high level of integration for USB graphics devices, support higher HD display resolutions, and increase overall performance for smoother video playback.

Hardware

• Konica Minolta Holdings Inc. would start output at its new factory in Japan that makes high-tech film used in LCD panels by autumn 2010 due to a strong recovery in panel and TV demand. Konica Minolta had planned to begin production at the new plant in autumn 2009, but the company late last year decided to delay the start-up as the global downturn forced panel makers to cut output. Konica Minolta dominates the global market for triacetyl cellulose (TAC) film, which protects the polarisation plates used in LCD panels, with bigger rival Fujifilm Holdings Corp. Konica Minolta, which also competes with Canon and Ricoh in producing copiers and printers, plans to spend 18 billion yen (US$194 million) to build the new factory, which will be capable of making 50 million square metres of TAC film a year.

Telecommunications

• NTT DoCoMo (DCM) president Ryuji Yamada said the Japanese operator is on track for launching its new Long Term Evolution (LTE) mobile network in 2010, reports the Financial Times. The adoption of LTE will see DoCoMo's handsets become compatible with other operators' 3G networks for the first time since the 2001 launch of its FOMA service, which used a WCDMA standard that was slightly different to the one rolled out by the majority of the rest of the world. DoCoMo has learned a hard lesson from being the first operator in the world to launch 3G services. DoCoMo plans to launch LTE handsets in 2011 that are also compatible with its current 3G network, so customers can still access services if they're outside an LTE coverage area. DoCoMo will use its high-speed LTE network to offer mobile content services in a bid to drive new revenue in the saturated Japanese market.
• Softbank Corp. (SFTBF.PK), Japan’s third biggest mobile telecommunications provider, raised 30 billion yen (US$320 million) from the first BBB rated bonds sold to institutions in Japan by a non-utility borrower since Lehman Brothers Holdings Inc.’s collapse in September. The Tokyo-based company, priced three-year, 4.72 percent notes to yield 4 percentage points more than the yen swap rate, according to data compiled by Bloomberg. Softbank, rated the second-lowest investment grade of BBB by Japan Credit Rating Agency, becomes the first non-utility company with that rating to sell bonds to institutional investors in Japan for 10 months. Softbank will use money raised from the securities to repay debt, it said in a filing with Japan’s finance ministry today. The company sold 60 billion yen in 5.1 percent fixed-rate bonds to individual investors in May, Bloomberg data show.
• Softbank casts its eyes on the Greater China Region and inked a strategic cooperation agreement with Shanghai Media Group (SMG) on June 29, 2009. Softbank Founder Masayoshi Son and SMG President Li Ruigang signed on the agreement. The two parties will jointly to develop new media digital content business. Softbank is reported to cooperate with Far Eastone Telecommunications Co., Ltd. in August to launch mobile phone cartoon services. Far Eastone is in talks with Softbank subsidiaries in an attempt to introduce Japan's well-known cartoon works into Taiwan as soon as possible.

Semiconductor

• Japan's Ushio Inc. announced its subsidiary Ushio America Inc. has acquired a 49 percent stake in U.S. firm Necsel Intellectual Property Inc. Necsel has technology for low-cost mass production of visible-laser light sources, and Ushio plans to leverage this to boost its own competitiveness in the markets for light sources for data projectors and digital cinema display systems. Using the technology, Ushio will be able to broaden its lineup of light sources to include semiconductor lasers across the complete spectrum of visible wavelengths. The company plans to purchase the remaining 51 percent of Necsel over the next five years and turn the unit into a wholly owned subsidiary

Media, Entertainment and Gaming

• Square Enix Holdings Co. (SQNXF.PK) has shipped three million units of its "Dragon Quest IX" video game software in Japan since its release. In total, global shipments of the "Dragon Quest" series have surpassed 50 million units since the popular franchise debuted in 1986. Sales of the highly anticipated latest installment are going strong, too, with some 2.5 million units flying off the shelves in its first three days on the market -- beating the roughly 2.4 million of "Dragon Quest VIII," which was released in 2004. For the first time in the series, "Dragon Quest IX" runs on the Nintendo DS hand-held system. And through Wi-Fi wireless technology, up to four nearby gamers can play together.

Korea

Telecommunications

• SK Telecom Co. (SKM) is considering bidding for Kazakhstan's Mobile Telecom-Service, as part of its recent efforts to seek business opportunities overseas. Kazakhtelecom, Kazakhstan's incumbent telecommunications operator, said in late June that it plans to sell its 51 percent stake in Mobile Telecom-Service and that it would accept letters of intent from potential bidders by and final bids by Aug. 31. Mobile Telecom-Service, Kazakhstan's smallest GSM operator, was launched in 2007 and provides services under the brand Neo with 920,000 subscribers.

Mobile/Wireless

• Ericsson (ERIC) plans to invest US$1.5 billion in South Korea over the next five years. The company would set up a research centre in the Asian nation to develop environmentally friendly and fourth-generation wireless technologies. Ericsson also planned to increase the number of employees at its Korean unit to 1,000 from 80. The Korean government was determined to provide a level playing field for foreign businesses to compete with domestic rivals. The investment was expected to help boost Korea's competitiveness in the market for long-term evolution, or LTE, high-speed wireless technology, backed by Ericsson. AT&T and Verizon Communications are also choosing the standard. Verizon Wireless, the biggest U.S. mobile-telephone company, aims to begin offering a high-speed network in all U.S. regions by 2015 using LTE, which is scheduled to reach 30 markets by next year. LG Electronics, Asia's second-largest mobile-telephone maker, in December said it developed a faster wireless chip used in mobile telephones based on the technology.

Biotechnology

• Samsung Electronics plans to invest about 500 billion won (US$389 million) in the biotech medicine business. Korea’s economy minister Lee Youn-ho said that Samsung, the world's top maker of memory chips and flat-screen TVs, would spend the amount over the next five years on the biosimilar business. Biosimilars are versions of biopharmaceuticals whose patents have expired. Samsung declined to confirm the size of the investment but said biosimilars presented a new growth opportunity for the technology giant. Lee signed a letter of intent with several domestic firms, including Samsung Electronics and LG Life Science, on their investment in a government biosimilar industry development initiative, with Korea Development Bank and a state-led fund already committed to providing financial support.

China

Internet

• China's Ministry of Commerce (MOC) has not ruled against the proposed merger between Sina (SINA) and Focus Media (FMCN); documents for the merger have not yet been put on MOC records. Focus Media CEO Jason Jiang is "quite anxious" about the merger, and said recently that the MOC has continuously asked for more documentation. The companies first submitted an application for their merger in late December 2008.
• As of the end of 2008, China saw a netizen base of 298 million, and an Internet penetration rate of 22.6 percent, outracing the global average level of 21.9 percent.

Mobile/Wireless

• A total of 13.21 million mobile phones were sold in China in May 2009, up 9.6 percent from the previous month. The number of GSM mobile phones sold in May increased by 12.5 percent month-on-month to 11.06 million units, while only 2.15 million CDMA handsets, which included 39,800 3G CDMA 1xEVDO handsets, were sold in May, down 3.4 percent from April. The dip in CDMA mobile phone sales is the result of China Telecom's shift in focus from 2G to 3G. In addition, both China Mobile and China Unicom implemented subsidies within their 3G service plans in 2009 to attract more users. Five foreign brands, Nokia, Samsung, Motorola, Sony Ericsson and LG, accounted for a 65.6 percent share of China's mobile phone market in May. Nokia had the largest market share of 31.9 percent last month. Domestic mobile phone manufacturer ZTE was the sixth-largest brand in May with a 3.8 percent market share.
• Z-Obee Holdings, which provides design services for mobile-telephone manufacturers on the mainland, has launched its own handset brand to meet the country's growing demand for stylish wireless devices. The Singapore-listed company's new "Vim" brand for the mainland mobile-telephone market will cater to price-conscious consumers keen on using fashionable, easy-to-operate handsets. The firm's production road map includes launching a new model every 45 days, which would enable it to introduce at least eight models in Hong Kong and on the mainland each year. The initial batch of Vim handsets being introduced on the mainland includes a his and hers model designed for couples that has a text message authentication function. This allows text correspondence between the pair to be decoded with a specific password for privacy. Each Vim handset has a voice diary function, allowing users to record appointments on the phone and be automatically reminded by the device at the designated time.

Telecommunications

• China Mobile Ltd. (CHL) will invest 70 billion yuan (US$10.2 billion) in building and upgrading its telecommunications networks, and promoting the use of its 3G services in the country's vast rural areas over the next three years. The ministry will help it promote the adoption of 3G-enabled applications in rural areas.
• China's three telecoms carriers, China Mobile, China Unicom (CHU) and China Telecom (CHA), injected more than 100 million yuan (US$14.6 million) in online advertising for two consecutive months of May and June. Their online ads expenses amounted to 198 billion yuan in May, when it welcomed the World Telecommunications Day on May 17, and China Unicom started trial operation of WCDMA. China Unicom's online ads input reached 78.79 million yuan on that month. In the same period, the carriers paid large amount of money in TV advertising as well, shouldering into prime time of CCTV, China's leading television station. Their expenses on online advertising fell, but still stayed above 100 million yuan to 115 million.
• ZTE Corp. (ZTCOF.PK) has captured 34 percent of the latest 8.6 billion yuan (US$1.3 billion) 3G network expansion tender by China Mobile Communications Corp. Huawei Technologies won 22 percent while partner Nokia Siemens Networks claimed 7 percent. Datang Mobile Communications Equipment and domestic partner FibreHome Technologies ranked third with a 21 percent share. The rest went to China Putian, New Postcom and Ericsson, each winning five to six percent. ZTE and Huawei were helped by their offers of a free upgrade in China Mobile's existing TD-SCDMA equipment, which was installed in the previous two phases of network construction. Industry watchers said China Mobile's preference for supporting domestic vendors and homegrown technologies also enabled ZTE, Huawei and Datang to take a bigger share. As a result, foreign vendors' share was shrinking. The latest tender was the third by China Mobile for a network covering 200 cities or 70 percent of the areas on the mainland. The original contract size was about 8.6 billion yuan for the installation of 39,000 base stations.
• China Unicom aims to go up against market leader China Mobile for high-end users as early as October, thanks to its exclusive sales agreement for the popular Apple (AAPL) iPhone handset. Unicom and Apple are expected to announce a schedule for the iPhone's introduction soon. Meanwhile, industry sources have confirmed that Apple has already submitted the device to a Ministry of Industry and Information Technology laboratory for official approval. Unicom and Apple could not be reached for comment on the deal, but telecommunications sources said Unicom would launch the handset in the fourth quarter when its 3G mobile network will cover 284 cities across the country, up from 55 cities at the end of last month. The full commercial launch of its 3G network plus the exclusive deal with iPhone is expected to put pressure on China Mobile to defend its high-end users.

Hardware

• Greater China is expected to see an almost fourfold increase in demand this year for mini-notebooks, commonly known as netbooks, as computer makers aggressively market the low-cost devices amid the economic downturn. That growth spurt is likely to boost sales for the market's leading notebook personal computer suppliers - including mainland Lenovo Group (LNVGY.PK), Hewlett-Packard (HPQ), Dell (DELL), Toshiba (TOSBF.PK), Acer and AsusTek Computer (AKCPF.PK) and operators of high-speed 3G mobile networks. Netbook shipments on the mainland, Hong Kong and Taiwan are forecast to hit 3.9 million units, up nearly 260 percent from 1.1 million units last year. The market research firm said total industry shipments would reach nearly 33 million units, up from its earlier estimate of 27 million units. That would result in a global netbook penetration of about 20 percent and flat year-on-year demand for pricier, full-featured laptops. Many buyers were adjusting their discretionary spending and were buying netbooks as lower-priced alternatives to traditional laptops. Netbooks are smaller than typical laptops, carry few software applications and are mainly used for wireless internet access.
• Lenovo Group plans to expand its sales network coverage from more than 100 Indian cities to more than 300 within 2009. The company is currently restructuring to divide its global business into mature and emerging markets. Lenovo previously will open 30 retail locations in India to bring its store total to 150 and expand its service centers from 130 to 250.
• Shenzhen-based Coship Electronics Co., Ltd. has won an order worth US$21 million from EMB, an old customer in South America to supply digital TV set-top boxes. The order from EMB represents about 6.79 percent of Coship's total operating revenue in the entire 2008 and is the first overseas contract that Coship makes public this year. In November 2008, Coship got a set-top box order valued at US$12.21 million from the South American company. Coship had sold set-top boxes worth 120 million yuan (US$17.5 million) to EMB as of June 30, 2009, eight months after it secured the first order from the latter. The Shenzhen company, engaged in the production and sales of digital TV equipment and electronics, saw its digital TV set-top box software and hardware sales revenue account for 93.94 percent, 96.83 percent, and 95.94 percent of its revenue from major business in 2003, 2004, and 2005, respectively.
• TCL Corp. said that its net profit may plunge 80 percent from a year earlier to 85 million yuan (US$12.4 million) during the first half of this year. TCL Communication Technology Holdings Ltd, one of TCL's subsidiaries, saw sales of handsets and accessories slide 12.32 percent year on year to 1.02 million units last month, while its first-half sales declined 24.69 percent from a year earlier to 5.06 million units. TCL Multimedia Technology Holdings Ltd, another subsidiary of TCL Corp, sold 616,898 LCD TVs in June, up 60.3 percent from a year earlier, and 342,353 CRT TVs, down 56.1 percent year on year. TCL sold more than 2.31 million LCD TVs in the first five months of this year, representing a year-on-year increase of 103.7 percent. The sales volume of LCD TVs in the first five months accounts for nearly 60 percent of the company's sales in 2008.

Alternative Energy

• Suntech Power Holdings (STP) plans to invest 30 billion yuan (US$4.4 billion) in the four projects with a combined capacity of 1.8GW that it signed up to in recent weeks. The money represents just the initial investment. China's long term plan for the PV industry is 70 percent of projects will be on-grid and 25 percent building integrated PV.
• LDK Solar Co. (LDK) has purchased a 70 percent stake in Italian systems integrator Solar Green Technology for an undisclosed sum. The move is expected to enhance LDK Solar's presence in the Italian photovoltaic sector. In addition, the deal will help Solar Green Technology grow further through its partnership with LDK Solar for several projects in Italy and Europe.
• ReneSola Ltd. (SOL) has successfully commenced trial production on the first batch of polysilicon from Phase 1 of its two-phase, 3,000 metric ton annualized capacity polysilicon manufacturing facility located in China's Sichuan province. ReneSola's two-phase, 3,000 MT annualized capacity polysilicon manufacturing facility utilizes the Siemens process and a closed loop system to produce polysilicon. Phase 2 of the facility, representing approximately 1,500 MT annualized capacity, is scheduled to reach mechanical completion in September 2009.

Hardware

Telecommunications

Semiconductor

Alternative Energy

Internet

China

Internet

Telecommunications

Media, Entertainment and Gaming

Hardware

Alternative Energy

Telecommunications

Mobile/ Wireless

Semiconductor

Korea

Semiconductors

Hardware

China

Internet

Software

Telecommunications

Hardware

Alternative Energy

• • •

Internet

• Yahoo Japan Corp. (YHOO), the operator of Japan’s most- visited Internet portal said full-year net income rose 19 percent to 74.7 billion yen (US$756.8 million), with a 1.4 percent rise in sales. The company expects first-quarter profit of between 19 billion yen (US$192.5 million) and 20.1 billion yen (US$203.6 million).

Business-to-business (B2B) media company revenue declined 2.2% in 2008 vs. 2007, but revenue growth in online, live events, and data products helped offset revenue declines for magazines, according to American Business Media’s (ABM’s) 2009 Media Financial Survey.

The new survey, which attempts to accurately measure today’s integrated B2B media model of print, online, data and events, found that overall B2B media company revenue remained above 2006 levels in 2008, primarily because of a 9.9% revenue increase in 2007 over 2006.

• • •

Telecommunications

• Softbank's (SFTBF.PK) earnings will be impacted by an unexpected 75 billion yen (US$758.7 million) loss as a side-effect of the acquisition of Vodafone's (VOD) Japanese operations. The charge was related to defaults on the collateralized debt obligations (CDOs) it had taken out to insure against defaults on its loans. Softbank will redeem the bonds through a credit line facility provided by Mizuho Corporate Bank. But despite the charge, Softbank has added 10 billion yen (US$102.8 billion) to its 2008 earnings forecast, due to gains from the company's cost-cutting measures. The company now expects to post an operating income of 350 billion yen (US$3.6 billion) when it announces its results on April 30. The company expects the charge to impact net income by 44.4 billion yen (US$456 million). Softbank declined to provide a net profit forecast but said it will remain positive despite the unexpected charge.
• KDDI Corp. (KDDIF.PK) is expected to report a 12 percent rise in consolidated operating profit to about 450 billion yen (US$4.6 billion) for the fiscal year ended March 31. This closely matches KDDI's earlier forecast of 443 billion yen (US$4.5 billion). Revenue at the company is expected to have shrunk for the first time in six years, with falling sales of cellular phones and reduced usage charges resulting in lower average revenue per user. The increase in KDDI's net subscribers will be about 503,700 for fiscal 2008, which is significantly lower than the 2.15 million subscribers in the previous fiscal year. Business conditions at KDDI are not expected to improve significantly in fiscal 2009. The company's operating profit is expected to rise, partly because sales expenses will decline through the offering of installment plans.

T-Mobile USA (DT) has sold 1 million G1 by HTC phones since its introduction last October. That’s small compared to the iPhone (AAPL) (which has sold 8 million in 80+ countries during that period). It’s also not as fast as Nokia (NOK), which thanks to its strong global distribution, was able to achieve the same milestone for their 5800 phone in half the time.

Still, it’s a strong start for a brand-new platform and a phone that was rushed to market with serious performance compromises.

• • •

Hardware

• Toshiba Corp. (TOSBF.PK) will consolidate its two domestic white goods factories into one by year end as part of efforts to reorganize its struggling home appliance business. White goods subsidiary Toshiba Home Appliances Corp. is to stop production at its Aichi Prefecture plant. Subsequently, output of washing machines and clothes dryers is to be transferred to a unit in Guangdong Province, China. Production of large items generally will be shifted away from Japan, except for air conditioners.

• • •

Hardware

• Toshiba Corp. (TOSBF.PK) may have to issue new shares to bolster its battered capital base. The company warned last month it would post a US$3 billion net loss in the year to end-March, hit by sliding demand for semiconductors and electronics. That warning triggered downgrades by rating agencies Standard & Poor's and Moody's Investors Service, citing Toshiba's dwindling capital and a near-US$20 billion debt burden. Toshiba has been issuing commercial paper since last month and could, in theory, take on more loans, but banks are likely to be wary about piling more debt on to a capital structure so light on equity. Toshiba's shareholders' equity ratio will likely fall into single digits in the year to March, while struggling rivals NEC Corp (NELTY.PK) and Fujitsu (FJTSY.PK) have been able to keep their ratios above 20 percent. A 300 billion yen (US$3.1 billion) issue would dilute share value by nearly 40 percent. The stock has lost about 70 percent in the past year. Toshiba may eventually need up to 1 trillion yen (US$10.3 billion) to keep investing in NAND flash memory, which is used in mobile phones and portable music players like Apple Inc's (AAPL) iPod.

• • •

Telecommunications

• • •

Hardware

• • •

Hardware

• Panasonic Corp. (PC) will slash about US$1.5 billion from its planned investment in two new flatscreen TV plants and shut down unprofitable businesses as demand for high-end electronics falls globally. The company will cut about 23 percent from its planned US$580 billion investment through 2012 in two new TV panel factories in Japan. The company scaled back its ambitious plan as a result of market conditions. The company still plans to sell 50 percent more TVs next fiscal year, a total target of 15.5 million units. It will also undertake a major launch of home appliance sales in Europe during that period. Panasonic makes flat-screen TVs based on both plasma and liquid crystal display technology, and is ramping up production to keep up with domestic rivals such as Sharp (SHCAY.PK) and Sony (SNE).
• Hitachi Ltd. (HIT) is expected to post a group net loss of more than 100 billion yen (US$1.1 billion) for the year ending March 31, 2009 due mainly to a sharp fall in microchip sales. The company had forecast a net profit of 15 billion yen (US$165 million). Renesas Technology, a chipmaking joint venture of Hitachi and Mitsubishi Electric (MSHBY) , is also expected to report a net loss of about 200 billion yen (US$2.2 billion). Like many Japanese exporters, both companies are also being hurt by the yen's strength against the dollar and the euro. Hitachi is expected to report a 13 percent fall in group operating profit to just under 300 billion yen (US$3.3 billion). Orders for automotive equipment are down and sales have been lackluster for flat-panel TVs and other electronics.
• Toshiba (TOSBF.PK) is in talks to buy Fujitsu's (FJTSY.PK) hard-disk drive business in a deal reportedly worth 30-40 billion yen (US$335-US$447 million). A deal would create the world's largest maker of small hard drives that are used in electronics products such as laptops and car navigation systems. A deal would be announced at the end of the month if the heads of the two companies come to an agreement at a meeting to be held within the week. Toshiba wants to buy Fujitsu's hard-drive manufacturing and sales networks, including Fujitsu's two hard-drive plants, one in Thailand and one in the Philippines. The deal is not expected to include a plant in Nagano prefecture, north of Tokyo, where Fujitsu makes hard-drive parts, or the hard-drive production segment of Fujitsu unit Yamagata Fujitsu. Fujitsu is looking at selling its remaining hard-drive operations to other firms with an eye on withdrawing from the business altogether.
• Toshiba has expanded its collaboration with Intel (INTC) and Microsoft (MSFT) to enable it to develop devices including an LCD TV, an LCD TV/DVD, and a standalone network player that all support the Widget Channel applications framework promoted by Intel and Yahoo (YHOO) and include Microsoft's Extender for Windows Media Center technology. The Widget Channel applications framework allows viewers to access a rich content library over the internet and information services via an interface on a TV screen. The Extender for Windows Media Center technology will enable viewers to access a wide range of digital content from Windows Media Center on the PC through their big screen TV.
• Sanyo Electric Co. (SANYY.PK), which is being acquired by Panasonic Corp., cut its annual profit forecasts, citing falling demand for semiconductors, electronic components and the stronger yen. The company now expects to break even in the year ending March 31 compared with net income of 35 billion yen (US$393 million) forecast on November last year. Sanyo cut its forecast of operating profit, or sales minus the cost of goods sold and administrative expenses, by 40 percent to 30 billion yen (US$331 million).
• Sony is expected to post an operating loss of about 100 billion yen (US$1.1 billion) for 2008/09, far short of the company forecast for a profit of 200 billion yen (US$2.2 billion). The operating loss, the first in 14 years, could be double that depending on inventory conditions in the January-March quarter. Analysts on average see an annual profit of 18.5 billion yen (US$204.2 million). The company is expected to cut 16,000 jobs, curb investment and pull out of some businesses to save US$1.1 billion a year as the global recession hits demand for its products.

Telecommunications

• Softbank Mobile Corp. (SFTBF.PK) saw the largest net increase in subscriptions among mobile phone carriers in Japan for the first time in 2008, after topping the rankings consecutively for 20 months through December. The company's free phone service between its subscribers and the release of Apple Inc.'s (AAPL) iPhone 3G in July and that of other new handsets helped it attract customers. Softbank's cumulative total of subscriptions exceeded 20 million on January 1, 2009. Softbank's net subscription increase last year came to 2,386,300, followed by NTT DoCoMo Inc. (DCM) at 1,004,600 and KDDI Corp. (KDDIF.PK) at 995,400. KDDI dropped to third from first place in 2007, while NTT Docomo, the largest of the three, moved up one notch to second from the third slot.
• NTT DoCoMo and Fujitsu have co-developed a mobile phone for the Taiwanese market based on the FOMA F905i model sold in Japan. The new handset was officially launched under the model name F905i in Taiwan by Far EasTone Telecommunications. This first mobile phone codeveloped by NTT DoCoMo and Fujitsu for a market outside of Japan is said to allow users to view and input the traditional Chinese character set, the standard writing system in Taiwan, enabling access to Far EasTone Telecommunications's i-mode mobile internet service in the local language.

Semiconductor

• SanDisk (SNDK) and Sony have announced the joint development of two expanded Memory Stick formats to achieve a maximum storage capacity of 2-terabytes and enable a maximum datatransfer speed of 60 mbps. The new Memory Stick Format for Extended High Capacity of up to 2TB of data is 60 times higher than the Memory Stick PRO format's current 32GB limit. The new format is scheduled to support the MagicGate copyright protection technology and Access Control Function. Memory Stick HG Micro format has an 8-bit parallel interface and offers an increased interface clock frequency of 60MHz, enabling 60Mbps data transfer speed, which is three times faster than the conventional serial 4-bit parallel interface and 40MHz interface. SanDisk and Sony share a long collaborative history of developing products and technologies.

Media, Entertainment and Gaming

• Japan Broadcasting Corp., better known as NHK, has compiled a deficit budget for fiscal 2009, its first in 13 years, as the costs of introducing digital terrestrial broadcasting are expected to rise. NHK is expecting income of 670 billion yen (US$7.3 billion) in the next fiscal year starting in April, up 1.9 percent from the previous fiscal year, while expenditure is estimated up 4.0 percent. Of the expenditure, 15.8 billion yen (US$174 million) will be allocated for the introduction of digital terrestrial broadcasting, which will be completed in July 2011.
• Goldman Sachs Group Inc. (GS) plans to make a takeover bid for full control of USJ Co., operator of the Universal Studios Japan theme park in Osaka. Goldman’s Tokyo-based Crane Holdings fund that now holds a 41 percent stake is preparing to acquire the remaining shares in the company by March 31, the person said, declining to be identified. The 59 percent stake to be purchased would be worth about 51 billion yen (US$568 million). Goldman Sachs invested 20 billion yen in Universal Studios Japan in 2005. The Nikkei newspaper said earlier that Goldman Sachs may turn USJ into a unit and delist the company from the stock exchange. It didn’t say where it obtained the information. Universal Studios Japan opened in 2001, drawing 30,000 customers on its first day. The company reported net income of 4.13 billion yen for the six months ended Sept. 30 with revenue of 34.33 billion yen, after introducing new characters including Sanrio Co.’s cartoon cat Hello Kitty. The park’s attendance will be about 8.6 million for the year ending March 31, compared with 9.9 million five years earlier, USJ’s Takahashi said.
• Japan's Square Enix Holdings Co Ltd (SQNXF.PK) said it enjoyed robust holiday sales despite a slowing economy, and the videogame maker expects its operating profit to be roughly in line with its forecast for the year to March. The global downturn has prompted some consumers to give up purchases of big-ticket items such as cars and flat TVs, but the game industry is relatively well-shielded as people stay home and turn to low-budget entertainment. Square Enix, known for such blockbuster titles as "Dragon Quest" and "Final Fantasy", said last November its operating profit was likely to dip 2.4 percent to 21 billion yen (US$236 million) this business year compared with the previous year. Analysts on average expect Square Enix to post an operating profit of 27.4 billion yen, according to Reuters Estimates. In the longer term, President Yoichi Wada said the company now appears likely to miss its recurring profit target of 50 billion yen for the year ending in March 2011, given the global downturn and a firmer yen, which eats into exporters' revenues when converted into the Japanese currency. Japanese videogame software makers including Square Enix and rivals Konami Corp (KNM) and Capcom Co Ltd (CCOEF.PK) will need to expand their overseas presence as the population in Japan is shrinking as well as ageing rapidly. For the current business year to March, Square Enix forecast a recurring profit of 20 billion yen. Wada said he was in talks with quite a few companies on possible acquisitions, repeating his usual reply to M&A questions. Square Enix last year offered to buy smaller Japanese rival Tecmo in a deal worth at least about US$100 million, but Tecmo rejected the proposal and said it would instead merge with another Japanese game developer, Koei Co Ltd.

Mobile/ Wireless

• Domestic shipments of mobile phones including those for the personal handy-phone system in November tumbled 29.8 percent from a year earlier to 3.49 million units, a decline for the fifth straight month. While the cellphone market is already saturated, product offerings lacked enough appealing new functions to stir demand and consumers were also cutting down on spending. Shipments between January and November also plummeted 16.9 percent to 38.83 million units, and shipments in 2008 are expected to fall sharply from the year before. The so-called One-Seg handsets that let users view terrestrial digital television programs accounted for more than 90 percent of the total monthly shipments in November.

• • •

Hardware

• Mitsubishi Electric Corp. (MSHBY) has received an order to build the ST-2 communications satellite for a joint venture between Singapore Telecommunications Ltd. and Taiwan's Chunghwa Telecom Co. for 13 billion yen (US$14 million). With the order, Mitsubishi Electric will become the first Japanese satellite maker to enter the commercial communications satellite market outside Japan, using its original Japanese-made satellite bus platform. The ST-2 will succeed the ST-1 jointly owned by SingTel and Chunghwa for their various communications businesses. For the production of the ST-2, Mitsubishi Electric has proposed using its original DS2000 satellite bus platform already used in satellites for the Japan Meteorological Agency and SKY Perfect JSAT Corp., an operator of communications satellite broadcasting businesses.
• Hitachi Ltd. (HIT) and U.S. chipmaker Intel Corp. (INTC) would jointly develop solid state drive (SSD) memory devices, which are seen as a promising alternative to hard disk drives. The move marks a strategic shift for Hitachi, the world's third-largest hard drive maker, which until now has not made a commitment to SSD technology. SSDs are increasingly being used as the storage device in laptop PCs, primarily because they are better at absorbing shocks and consume less power than hard disk drives. Under the agreement, Intel will manufacture SSDs jointly developed by the two firms. Hitachi will sell the devices, with the first shipment planned for 2010. SSD business would market the devices for business-use such as in servers and computer storage systems, and that it would not follow rivals like Toshiba (TOSBF.PK) in targeting laptop PCs and other consumer-based applications.
• Goldman Sachs Group Inc. may seek to increase its stake in Sanyo Electric Co. (SANYY.PK), challenging Panasonic Corp.’s (PC) plans to take over the large makers of rechargeable batteries. The bank may offer to buy the shares from Daiwa Securities Group Inc. and Sumitomo Mitsui Financial Group Inc. Goldman earlier spurned Panasonic’s offer of 23 percent less than Sanyo’s closing price. A bid by Goldman would force Panasonic to raise its offer or abandon the biggest acquisition in Japan’s consumer-electronics industry. The latest proposal values the 70 percent stake owned by the three banks at 557 billion yen (US$6 billion), almost double what they paid in 2006. Sanyo lost 12 percent in Tokyo trading, taking its loss for the year to 3.9 percent.

Telecommunications

• Alibaba Group's (ALBCF.PK) online payment tool Alipay partnered with SoftBank Payment Service (SFTBF.PK) to provide cross-border payment services to Japanese companies, reports 163.com. The SoftBank subsidiary will promote Alipay to Japanese sites. SoftBank Payment Service expects ten or more Japanese sites to use the Alipay service to sell to Chinese consumers in 2009. Alibaba Group subsidiary Alibaba.com partnered with Softbank to establish Alibaba.com Japan in May.
• NTT DoCoMo Inc. (DCM) is canceling its planned spring release of a new smart phone from Nokia Corp. (NOK). The move comes in response to the Finnish company's announcement that it will stop supplying handsets to NTT DoCoMo Inc. and Softbank Mobile Corp. by early next year. DoCoMo was preparing for the rollout of Nokia's E71 handset, which features enhanced Internet capabilities and has a full keyboard with the same setup as can be found on personal computers.
• NTT DoCoMo Inc. aims to boost its overseas business to account for 10 percent of sales within five years from 2 percent now, as it continues to seek acquisitions after an investment in an Indian operator. DoCoMo announced last month that it would pay US$2.7 billion for a 26 percent stake in Tata Teleservices, India's No. 6 wireless carrier, making an entry into the world's fastest-growing major mobile market. Toshinari Kunieda, senior vice president and managing director of DoCoMo's global business division, said that the company aims to expand its overseas business through more acquisitions and increased cooperation with firms in which it has already invested.

• • •

Hardware

• Canon Inc. (CAJ) will delay the construction of a US$1 billion toner cartridge components plant in Japan by six months as the global downturn hits sales and usage of office equipment. Canon plans to start building the plant in western Japan in June 2009 with production due from March 2010. Canon will spend 60 billion yen (US$621 million) or more to build a toner cartridge plant in the U.S. state of Virginia and the start of output there in December 2009 remains on track. Consumable items such as toners and related services are an important source of profit for office equipment makers as they generally fetch high margins and provide a constant revenue stream. Canon cut its annual outlook, predicting its first profit decline in nine years as the economic slowdown drives up the yen and hurts copier and camera sales.

Internet

• Banking on the global appeal of Japanese pop and video games, social networking site MySpace would more than double the number of artists on its Japanese pages to get more clicks internationally. The growth of new sign-ups and page views is slowing in Japan for rival networking services such as mixi Inc., but Myspace, which launched its Japanese site two years ago, aims to buck the trend by expanding the range of sales artists can make on its site. This, allied with growing interest in J-Pop music and Japanese video games in other parts of the world, will help the doubled in the last six months to a little under 90,000 people.

Semiconductor

• Powerchip Semiconductor Corp. and Japan's Elpida Memory Inc. (ELPDF.PK) are in talks about strengthening their ties amid a slowdown in the dynamic random access memory (DRAM) industry. The two companies already have a Taiwan joint venture, Rexchip Electronics Corp. The company will explore further cooperation (with Powerchip) but it is too early to discuss the details. Closer ties could be financial as well as technological. Elpida was also ready to discuss cooperative ventures with ProMOS Technologies or other Taiwan DRAM makers. Elpida has US$2.2 billion cash in hand. Elpida had no immediate expansion plans in China but would seek to join forces with Powerchip if appropriate opportunities arise on the mainland.

Media, Entertainment and Gaming

• Yudo Ltd. is releasing a line of games for the Apple (AAPL) iPhone and iPod Touch that will be priced at US$0.99 cents apiece. Most games available for these devices cost around US$3.00. The new games will be made available worldwide through Apple Inc.'s App Store download delivery service. The first set of four games includes "Cutie Scratch," which involves rubbing the screen to make pictures appear, and "Spy Bug Radar," where a player tilts and moves the device while listening to radar-like sounds to zero in on a location. In addition to marketing its own games, Yudo will also serve as sales agent for games created by individuals, acting as proxy for testing software and signing contracts with Apple. The company will also provide advice on how to make games that will sell.
• Koei Co. Ltd. will take over smaller rival Tecmo Ltd. in a stock deal worth 20 billion yen (US$207 million), the latest in a series of consolidation moves in the industry. Koei and Tecmo, the maker of fighting game "Dead or Alive" and action title "Ninja Gaiden", plan to merge operations under a holding company in April. Each Tecmo share will be exchanged for 0.9 shares in the holding company, while one share in the holding firm, called Tecmo Koei Holdings, will be allotted to each Koei share, allowing Koei shareholders to take three quarters of the new entity. Larger rival Square Enix Holdings Co. Ltd. earlier this year offered to acquire Tecmo, but the company rejected the takeover bid and would instead merge with Koei, which offers history simulation game "Nobunaga's Ambition".

Telecommunications

• Softbank Corp. (SFTBF.PK) has seen a drop-off in sales of Apple Inc.'s iPhones due to technical issues, but problems have been resolved. Softbank launched the iPhone in July and is currently the exclusive supplier of the touch-screen handsets. Apple sold about 200,000 phones in Japan in the first two months. Since then, however, demand has been falling steadily, and analysts widely believe sales are unlikely to reach a total of 500,000 units, half the one million units that they previously thought Apple could sell. Softbank is barred from disclosing handset sales figures by its agreement with Apple.
• Nippon Telegraph and Telephone Corp. (NTT) will conduct a 100-for-1 share split on January 4, 2009 to eliminate fractional shares before electronic stock certificates are introduced next year. Stock exchanges in Japan will halt trading in the company's shares from Dec. 25 to 30 and the London Stock Exchange will halt trading in NTT shares from Dec. 24 to Jan. 4. The company aims to protect investors holding fractional shares who fear they could lose all value once the switch to electronic stock certificates is made in January 2009. NTT conducted a 1.02-for-1 stock split in 1995, resulting in a large amount of fractional holdings. The number of stockholders who still retain fractional shares accounts for just under half of all NTT shareholders.

• • •

Hardware

• Konica Minolta Holdings Inc. decreased full-year net profit forecast 40 percent to 42 billion yen (US$426.6 million) after decreasing net profit 22.2 percent to 29.3 billion yen (US$297.6 million) for the half-year. Revenue was up 1.5 percent to 533 billion yen (US$5.4 billion). Operating profit decreased 14.7 percent to 48.7 billion yen (US$494.6 million) and ordinary profit fell 12.4 percent to 47.9 billion yen (US$486 million). An interim dividend of 10 yen  (US$0.10) was declared and an annual dividend of 20 yen (US$0.20) per share is estimated. Full-year revenue forecast is down 6.8 percent.
• NEC Corp., Hitachi Ltd. (HIT) and Sharp Corp. (SHCAY.PK) issued dismal earnings outlooks for fiscal 2008 showing that Japanese companies are feeling increasingly pressured by flagging consumption and the growing risks of a global economic downturn triggered by the global financial and market turmoil. NEC said its group operating profit in the April-September period halved to 13.4 billion yen (US$136.1 million). Its pretax profit dropped 28.3 percent to 7 billion yen (US$71.1 million). The company attributed the decline to a sales drop in the network systems area and in its electron devices and semiconductor business as well as growing development costs. The electronics maker has decided not to pay an interim dividend initially set at 4 yen (US$0.04) per share due to possible impairment losses from historic sell-offs on stock markets worldwide. It also did not disclose a full-year dividend forecast, leaving open the possibility that it will skip payment of an annual dividend.
• Fujifilm Holdings (FUJI) would cut 1,250 jobs at its printer unit, Fuji Xerox Co., amid falling demand. The company had a 25 percent drop in operating profit for the six months to September and would spend up to 35 billion yen buying back up to 3.4 percent of its shares. The Japanese maker of digital cameras and photo films would also transfer about 1,250 Fuji Xerox employees into marketing jobs from administrative and other tasks. The job cuts at Fuji Xerox would be made through early retirement, and cost an estimated 8 billion yen (US$81 million) in the year to next March, and an additional sum in the next year. The cuts will trim about 5 percent from Fuji Xerox's staff.
• Sony Corp. (SNE) said a total of five personal computer makers, including Hewlett-Packard Development Co. (HPQ) of the U.S. and Japan's Toshiba Corp. (TOSBF.PK), are set to recall about 100,000 of its lithium ion batteries used in their notebook personal computers due to overheating concerns. The other three PC makers are Dell Inc. (DELL), Lenovo Group Ltd. (LNVGY.PK) and Acer Inc. 40 incidents of overheating, including some causing smoke or flame, have been reported overseas involving notebook computers using its 2.15Ah lithium ion cells. Of the 40, four led to minor burn injuries and 21 caused minor property damage. The batteries subject to the recall are those made from October 2004 to June 2005, and production line adjustments made during the period may be the cause of the overheating. The batteries subject to the worldwide recall include about 2,000 packs sold in Japan.

Media, Entertainment and Gaming

• Perfect World (PWRD) announced that its 3D multiplayer online role-playing game Chibi had found its way into the Japanese market by signing up with local partner C&C Media Company Limited. Chibi is the fourth game of Perfect World to land on Japan following the heels of Perfect World International version, Wulinwaizhuan, and Zhuxian. Chibi has been well received by game players since its debut early this year for its vivid image, unique system configuration, and historical subject. The game has thus far been introduced to Malaysia, Taiwan, Hong Kong, etc.
• Nintendo Co. Ltd. (NTDOY.PK) will likely launch a new model of its top-selling handheld player, the DS, in overseas markets by the summer of 2009. Nintendo will start selling the DSi, which can take pictures, play music and is slimmer than the current model, for 18,900 yen (US$192), in a move to revive slowing domestic sales ahead of the critical holiday season. Nintendo previously planned an overseas DSi launch in 2009. DS sales in the April-September fiscal first half grew 3 percent from a year earlier to 13.73 million units worldwide, beating Sony Corp's PlayStation Portable by 2-to-1. The DS and Wii console, which has outstripped both Sony's PlayStation 3 and Microsoft Corp's (MSFT) Xbox 360 in global sales, have been Nintendo's twin growth engines in recent years.

Telecommunications

• Softbank Corp. (SFTBF.PK) said its group operating profit for the April-September period rose 7.3 percent from a year earlier to an all-time high of 180 billion yen (US$1.8 billion) because of the strong profitability of its Internet, fixed-line communications and broadband infrastructure operations. The Internet conglomerate and the company, which usually does not release a full-year earnings outlook, expects its operating profit to rise 4.8 percent to 340 billion yen (US$3.5 billion) in the business year to March 2009. But its first-half earnings results were mixed with group net profit falling 11.5 percent from a year earlier to 41.12 billion yen (US$122 million) and group sales sliding 2.6 percent to 1.33 trillion yen (US$13.5 billion) due to a decline in sales of its mobile handsets despite steady growth in the number of its subscribers. Softbank, which has a share of around 18 percent in Japan's mobile phone services market, acquired an additional 142,800 subscribers in September, beating its bigger rivals for the 17th consecutive month.
• Japan's DSL service provider eAccess (ECLTF.PK) would conduct a tender offer for DSL service provider ACCA Networks, in which it already has a 45.1 percent stake, and plans to merge with the company in May 2009 in order to survive in a shrinking DSL market. The tender offer will be conducted through November 28, 2008. The move came as Japan's DSL subscriber base continues to decrease, especially in urban areas, as a result of growth expansion of fibre-to-the-home (FTTH) services. With DSL as their main businesses, both eAccess and ACCA Networks are facing a challenging market environment. eAccess hopes that a merger with ACCA would help improve efficiency of their respective operations by generating synergies from the integration of sales, marketing, distribution, customer services and back-office functions. eAccess still sees some growth potential in Japan's DSL market.
• NTT DoCoMo (DCM) reported that its operating revenues for the first half the current fiscal year ending March 31, 2009 amounted to 2.3 trillion yen (US$23.2 billion), down 2.5 percent year-on-year. Operating income for the six months jumped 41.2 percent to 576.9 billion yen (US$5.9 billion). Net income rose to 346.7 billion yen (US$3.5 billion). For the quarter ending 30 September 2008 alone, its operating revenues amounted to 1.1 trillion yen (US$11.1 billion), while operating income and net income stood at 280.5 billion yen (US$3 billion) and 173.1 billion yen (US$2 billion), respectively. The operator reported 53.9 million mobile subscribers at end-September, including 46.4 million 3G "FOMA" and 7.5 million 2G "mova" subscribers. NTT's strong profit rise was partly attributable to its introduction of a new business model last November which lowered services fees but with higher handset prices for mobile users.

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Hardware

• Sumco Corp. (SUMCF.PK) slashed its annual outlook sharply, becoming one of the latest chip-related companies to be affected by a slowing economy. Cooling consumer sentiment ahead of the holiday shopping season has prompted makers of PCs, flat TVs and mobile phones to keep their inventories light, trimming demand for microchips. Sumco said its business environment was rapidly deteriorating as the financial market turmoil hits the real economy. Silicon wafers are used to make microchips. Sumco now expects its operating profit to total 65 billion yen (US$637 million) in the year ending January 31, 2009. Sumco also lowered its net profit forecast by 45 percent to 32 billion yen (US$340 million) for the current business year.