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A monthly review of the latest developments in Japan’s IT, telecom, and life sciences sectors

April 2006 - Volume IX, Issue IV

Triangle Technologies is the leading Japan Israel business development and investment advisory firm
www.triangletech.com

ISRAEL-JAPAN NEWS

+PMC-SIERRA TO ACQUIRE PASSAVE INC.

(BUSINESS WIRE, April 4th) PMC-Sierra, Inc. (NASDAQ: PMCS), a leading provider of broadband communications and storage semiconductors has entered into a definitive agreement to acquire Passave Inc., a leading developer of system-on-chip semiconductor solutions for the Fiber To The Home (FTTH) access market. The acquisition price of approximately $300 million. Although the buyer is an American company, the performance of Passave in the Japanese market (through OEMs such as Mitsubishi Electric) shows the importance of making business in Japan even if the final target is exit in the US.

***BUSINESS NEWS***

+PANEL OKS JAPAN POST'S ENTRY INTO INTERNATIONAL CARGO

(Jiji Press, April 13) Japanese government panel discussing how to promote Japan Post''s privatization gave its go-ahead to the public postal service firm''s entry into the international cargo market. the panel proposed allowing Japan Post to invest in ANA & JP Express Co. Eventually, ANA & JP Express will be owned 51.7 pct by ANA, 33.3 pct by Japan Post, 10 pct by transport service company Nippon Express Co. and 5 pct by shipping firm Mitsui O.S.K. Lines Ltd. Japan Post is eager to branch out into the international cargo market to broaden its business base and improve its profitability as demand for mail delivery services has been falling amid the growing use of the Internet. The process for privatizing Japan Post is set to start in October 2007 for completion 10 years later.

+SOFTBANK TO DROP VODAFONE BRAND

(www.crisscross.com, April 16) - Softbank Corp said it will drop the Vodafone brand in Japan after buying the British cell phone giant's struggling local operations. "A new, easy-to-understand and familiar company name and brand will be announced when preparations are in place," Softbank and Vodafone KK said in their joint statement. Softbank President Masayoshi Son also said he will double as president of Vodafone Group Plc's Japan unit. The Softbank group last month announced the acquisition of a 97.7% stake in Vodafone KK from the British parent for 1.75 trillion yen in the biggest ever leveraged buyout by a Japanese company.

+LESS EQUALITY IN JAPAN

(ASSOCIATED PRESS, April 9th) - As the Japanese economy emerges from a decadelong malaise, the nation is confronting a widening gap between and have-nots. The differences are challenging the country's view of itself as solidly middle class and egalitarian. On the upside, conspicuous consumption is in style, the number of Japanese millionaires rose by 10 percent from 2001 to 2004, to 1.34 million, Merrill Lynch's annual World Wealth Report said. The poverty rate - the proportion of the population below 50 percent of the national median income - nearly doubled from 8.1 percent in 1994 to 15.3 percent in 2000, the latest figure available. The percentage of households with no savings, once unknown in high-saving Japan, hit 22.8 percent last year, the highest since the national surveys began in 1953. The percentage of people on welfare has been steadily growing from 0.7 percent in 1995 to 1.11 percent in 2004, according to the Health Ministry. The number of households receiving welfare reached 1 million in October for the first time since the social welfare program began in 1951. Even with the increase in welfare cases, Japan is hardly a poverty stricken nation. The standard measure of income disparity, the Gini coefficient, shows Japan still more egalitarian than the United States and Britain, but less egalitarian than Sweden or Germany.

+RESURGENT JAPAN IN 2ND-LONGEST POSTWAR ECONOMIC EXPANSION

(Mainichi daily news) Japan's economy is logging its second-longest expansion since the end of World War II and is on track to grow by more than 2 percent this year, Japanese Economy Minister Kaoru Yosano said. The upward trend should continue until the summer of 2007, making the current growth streak the longest in postwar history. The only longer postwar expansion -- 57 months -- came in 1965 after Tokyo hosted the Olympics.

***TECHNOLOGY NEWS***

+NEW JOINT VENTURE TO DEVELOP CELLULAR COMPONENTS

(Nikkei paper, April 7th) - Panasonic, NEC and TI will establish a joint venture company that will develop 3G handset components. Panasonic Mobile Communications and NEC Electronics will also join. Panasonic and NEC will bear 30% each of the paid in capital, the remaining 40% will borne by TI, NEC Electronics and Mobile Communications. . The five companies will transfer about 100 people to work in the JV company. It is said that it would const more than 10 billion yen to develop a 3G handset and by commonizing the components, they hope that the development cost will be cut by 10 to 20%. The components will also be sold to other handset manufacturers.

+WORLD'S FIRST 3G HANDSET WITH VGA LCD

(JCN, Apr 14) - Vodafone K.K. recently announced its intention to launch a new 3G handset featuring the industry's first video graphics array (VGA) LCD screen. The Vodafone 904SH is made by Sharp and has four times the resolution of current quarter video graphics array (QVGA) LCD screens. The VGA LCD has 480x640 pixels and displays clearer images and characters than similar models.

+METI ENVISIONS HIGH-TECH 2025

(The Yomiuri Shimbun, April 16) - A draft of the Technology Strategy Map 2006, which envisions a high-tech society in 2025 in which, for instance, robot would be used to rescue people in marine accidents, has been compiled by the Economy, Trade and Industry Ministry, ministry sources said. The blueprint sets goals for 15 fields, including robotics and information technology, for technology innovations 20 years from now, the sources said. According to the blueprint, robots will play a wide range of roles in various fields in 2025, such as rescuing people at sea after accidents and serving food to senior citizens. Furthermore, electricity will be produced from hydrogen and oxygen, and long-lasting fuel cell batteries will be used for personal computers and mobile phones. Refrigerators will be able to display recipes for foods, including vegetables and fish, with IC tags encoded with information such as consume-by dates, when the foods are put into refrigerators. METI hopes to see a "real-time biological information sensor," which analyzes a person's blood simply by applying the sensor to an arm, put into practical use.

+JAPAN EYES MOON COLONIZED BY ROBOTS

(the Asahi Shimbun, April 13) - Japan plans to send robots to explore and set up a base on the moon, possibly within the next 10 years. The Japan Aerospace Exploration Agency has formed a team of researchers to promote the exploration of the moon and planets in the solar system using robots. The agency also established a team specializing in the development of technology for the lunar-based robots.

+MOBILE TV

(www.Eurotechnology.com, Apr 21st) - Digital terrestrial TV to mobile phones (mobile TV) started in Japan on April 1, 2006. Mobile TV allows to view television broadcasting always and everywhere. Mobile TV combines TV show broadcasts with news, information and commercial services via the internet in one handset, and therefore opens a new mobile commerce sector with many new opportunities. first indications are that consumer reponse exceeds expectations. Apparently more than 1/2 million mobile phone handsets for digital mobile-TV reception have been sold. Consumers (and advertisers) can chose between four types of mobile TV for mobile phones.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+ DNA PROFILING METHOD FOR CHICKEN

(JCN, March 29) - The National Institute of Agrobiological Sciences (NIAS) has developed a DNA profiling method for poultry in collaboration with the Aichi-ken Agricultural Research Center. The new method, which amplifies five microsatellite markers of the chicken DNA with PCR (polymerase chain reaction) and examines their lengths, can differentiate Nagoya Cochin, a well-received breed of chicken, from other chicken breeds such as broilers. The method is effective when used with processed poultry.

+STAFF SHORTAGES AFFECTING SERVICES

(The Yomiuri Shimbun, Apr. 17) - Local hospitals are suffering from a shortage of doctors because university hospitals that have dispatched doctors are now recalling them due to staff shortages at their own hospitals.