Japanese Tech Stock Weekly Summary

by: IRG Ltd

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

Media, Entertainment and Gaming

• According to the head of Yahoo Japan Corp. (YHOO), the company is looking to setting up alliances with a range of mass media. The company said it is considering the partnerships with newspapers and broadcasters in a bid to get more net-based advertisers. Yahoo Japan said it will consider all media groups for this undertaking.


• kabu.com Securities Co. announced that Mitsubishi UFJ Securities Co. (NYSE:MTU), BNP Paribas Securities (Japan) Ltd. (OTCQX:BNPQY), Goldman Sachs Japan Co. (NYSE:GS) and Credit Suisse Securities (Japan) Ltd. (NYSE:CS) will join its nighttime stock trading market. The decision marks the first time other brokerages are welcomed into the market in a bid to bring liquidity into the market and boost the turnover. In September, kabu.com opened the night market that only existing clients are allowed to use the online securities firm's proprietary after-hours trading system. Earlier in August, SBI Japannext Co., a joint venture between SBI Holdings Inc. and Goldman Sachs Group Inc., started activities in a similar after-hours market, hosting the trading of several brokerages. Industry observers said that the move by kabu. Com is expected to make the competition more intense in this sector of the securities market. The company is a member of the Mitsubishi UFJ Financial Group.


• KDDI Corp. (OTCPK:KDDIF) announced that it is entering into an alliance with local partners and a U.S.-based chip maker, a move that accompanies its decision to form a joint venture to bid for a license for next-generation high-speed wireless data communications services using mobile WiMAX technology. KDDI, the country’s second-biggest mobile carrier, has been one of the first supporters to promote mobile WiMAX technology and aims to surpass bigger player NTT DoCoMo Inc. (DCM) in terms of transmission speeds for wireless data communications services. Media sources indicated that a KDDI subsidiary called Wireless Broadband Planning K.K. is seen as receiving a capital injection amounting to a total of 850 million yen (US$7.3 million), up from the current 274 million yen (US$2.3 million). Following this capital infusion, KDDI will own 32.2 percent, with Intel Capital, East Japan Railway Co., Kyocera, Daiwa Securities Group Inc., and the Bank of Tokyo-Mitsubishi UFJ Ltd. owning the rest.

• NextWave Wireless (OTC:WAVE), a U.S. telecom firm, revealed its decision to sell its stake in IP Mobile, a move that makes it the second foreign firm to exit Japan's competitive mobile telephone industry after Britain’s Vodafone’s exit in 2006. In August, NextWave acquired a 69.2 percent stake in IP Mobile from Mori Trust, which made it the top shareholder of the company. With this development, Mori Trust Co. disclosed that it will buy back the stake and again. NextWave is a supplier of wireless broadband products, technologies and network solutions.


• Fullcast Co., (OTCPK:FULCY) a Tokyo-based human resources solution provider revealed its decision to book a group net loss for the year to this month, making it the first time since its IPO in June 2001. The company placed the group net loss at 700 million yen (US$6 million), replacing an earlier projected profit of 600 million yen (US$5.1 million).


• U.S.-based LED makers Cree Inc (NASDAQ:CREE) and Japan-based Nichia Corp announced that they have agreed to expand their patent cross-license arrangements announced in 2002 and 2005 to include additional patents relating to white LED technology and certain Cree patents relating to nitride lasers. The agreement also resolves infringement claims Nichia had asserted against LED products sold by COTCO International Ltd (a subsidiary of Hong Kong-based COTCO Luminant Device Ltd) prior to Cree's acquisition of COTCO Luminant Device Ltd and its subsidiaries in March. In a separate development, Nichia said it has filed a lawsuit in the Seoul Central District Court against South Korean LED maker Seoul Semiconductor Co. Ltd. alleging infringement of an LED-related patent. The lawsuit alleges that Seoul Semiconductor’s top-view type white LED products infringe Nichia's Korean patent. In the suit, Nichia is seeking damages for past infringement as well as an injunction against any further infringing activity.

• Fujifilm Holdings Corp. (FUJI) announced its decision to go into cost-cutting in its digital camera business, a move that include transferring all camera production to China and outsourcing some semiconductor processing to Toshiba Corp. (OTCPK:TOSBF). Specifically, the company said it would close a camera manufacturing unit, Fujifilm Photonics Co., with some 200 out of the 700 workers to be moved to a newly established assembly and testing company and no decision has been reached yet as to the remaining 500 workers. Fujifilm said it is looking to focus more on core businesses including medical and printing systems.


• Sony (NYSE:SNE) issued a denial regarding reports that it is selling its chips business to Toshiba. With the denial, Sony said it is considering ways to improve its chip operations even as it has not reached any decision yet about the matter.


• Media sources said Toshiba Corp. has made a decision to sell off a piece of valuable real estate in Tokyo's Ginza district to focus on its semiconductor chip operations. Toshiba plans to offer Ginza Toshiba Building to Tokyu Land Corp., a major real estate firm, in a deal placed at approximately 150 billion yen (US$1.2 billion) by the end of this year at the earliest. Sources said that Toshiba plans to use the money for its chip operations. Industry sources, in fact, indicate that Toshiba is in talks with Sony Corp. to acquire Sony's facilities to produce Cell advanced microprocessor chips for about 100 billion yen (US$865.8 million). The Cell chips were jointly developed by Toshiba, Sony and IBM Corp.

• Industry sources indicated that Japan Airlines Corp [JAL], with its plan to selling part of its credit card business, is initiating talks with potential buyers next month. The reports said that JAL may consider selling JALcard Inc. by the end of March as part of its restructuring plans. JALcard is No. 6 in Japan's credit card industry and is valued at about 100 billion yen (US$867 million).

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.