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

August 2004 - Volume VII, Issue VIII

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

Dan's Desk

From Triangle's CEO

Dan took the opportunity in which many Japanese companies take vacations in August to take some rest. As his rest involve quite a few daily business interruptions, we begged him to rest and not to contribute to this issue of the Newsletter.

We hope that all readers are/will rest.

Dan will come back to the next issue.

***TRIANGLE TECHNOLOGIES NEWS***

+ITX-EG LAUNCH THE SALE OF “EXASTORE”

(August 6) ITX E-Globaledge (ITX-EG) announced that they will launch the sale of “ExaStore” NAS Grid Access Software Platform developed by Exanet Inc. through their business partner Kodak Polychrome Graphics and Visual Processing Japan. “ExaStore” is characterised by its redundant cluster function, load balancer and dispersive file systems. This system supports all three network file protocols and can seamlessly integrate file systems in mixed environment of Windows/UNIX/Macintosh.
Exanet and Triangle are working together in Japan for the past two years. This is not the first deal we achieve together and probably not the last.

ISRAEL-JAPAN NEWS

+HAM-LET EXPANDED ITS BUSINESS IN JAPAN

(July 7th) Ham-Let expands its activity in the second important world market - Ham-Let acquires the Ultra Clean Technology division of Motoyama Japan.

+KVH TELECOM TO LAUNCH SERVICES SUPPORTED BY ATRICA

(Nikkei Communications, July 29) KVH Telecom (a telecommunications company established by Fidelity Investments, a portfolio management group in the United States) which is now providing a wide-area Ethernet service called "Ether-MAN," will start a new service, to be called "Ether-MAN Plus" featuring improved reliability as of August 1. The new service is capable of providing a similar level of high reliability to a leased line and a bandwidth guarantee. This has been made possible by using the EoMPLS (Ethernet over MPLS) technology not only at the up-link points but also at the end-to-end, using customer premises equipment.

***BUSINESS NEWS***

+JAPAN'S BROADBAND USERS EXCEED 16 MILLION

(The Ministry of Public Management, Home affairs, Posts and Telecommunications (MPHPT), August 6) According to the report, the total number of broadband users as of the end of June 2004 reached 16,188,201, including xDSL, fiber-to-the-home (FTTH) service and CATV Internet. This number represents an increase of 380,249 from the end of May.
The total number of FTTH service users was 1,417,483. This represents a monthly increase of 89,708 from the end of May. The total number of xDSL users reached 12,068,718. This shows an increase of 249,541 since the end of May. The number of CATV Internet users was 2,702,000, an increase of 41,000 since the end of May.

+UFJ AND SMFG

(JapanInc.Com, August 5th) UFJ, the struggling Japanese bank, is facing a shareholder revolt over its out-of-hand rejection of a merger proposal from Sumitomo Mitsui Financial Group SMFG). Anger is highest among UFJ's non-Japanese investors, who hold just over 31 percent of the shares. The move by investors follows a decision by the Tokyo District Court on Tuesday night prolonging by several weeks the freeze on merger talks between UFJ and Mitsubishi Tokyo Financial Group (MTFG). That deal, in its original form, would create the world's biggest bank by assets, surpassing Citigroup. But the deal was forced off the rails when Sumitomo Trust, which had previously agreed to buy UFJ's trust banking arm, obtained an injunction.
UFJ and MTFG had hoped to complete their merger by September 2005. UFJ has appealed to the Tokyo High Court, although the outcome may not be known for up to two weeks. It is possible that SMFG might engineer a hostile bid for UFJ - A move on such a scale would be unprecedented in Japan.

+MASSIVE NEW REAL ESTATE FUND

(nikkei.co.jp, Jul 30) Mitsubishi Tokyo Financial Group will set up a JPY200bn ($1.8bn) real estate fund, the largest in Japan, to invest in office buildings and commercial facilities in central Tokyo. The MTFG appear to feel that Japanese real estate values have bottomed out and will return at least 10% per annum over the next few years. At the same time, Deutsche Bank Group has done a 50/50 joint venture with Tokyu Land, to create a new company with JPY29bn ($263m) of funding, to manage real estate.

+PC DATA FOR 2003

(nikkei.co.jp) According to IDC Japan, 12.81m PCs were shipped in 2003, up 2.8% from the year before. The top brand was NEC with 21.2%, down slightly from 2002, then Fujitsu with 19.8%, also down slightly from last year. Dell Japan, which is now the third largest maker of PCs in Japan jumped 2% to a 9% market share.

+JAPAN'S ART AUCTION MARKET BOOMING ON THE BACK OF ECONOMIC RECOVERY

(AFP, August 19th) As Japan's economy recovers, its fledgling art auction market is rapidly expanding with the growth being driven by art lovers with money to spend rather than companies looking for an investment. The buyers are attracted by prices which are still a fraction of the frenzied levels of the early 1990s, when a Japanese industrialist paid more than 80 million dollars for a single work by Van Gogh. Last year the art auction market topped 10 billion yen and it is expected to reach 15 billion yen in 2004, up 50 percent year-on-year.

***GENERAL TECHNOLOGY NEWS***

+ SONY TO USE PLAYSTATION 2 CHIP IN FLAT-PANEL TVS

(The Nihon Keizai Shimbun, August 10) In an effort to catch up to Sharp Corp and other firms in the flat-panel television market, Sony Corp plans to install its high-performance game console chips in the flat-panel TVs that it is slated to release this fall. The new TVs will be equipped with chips used in the company's PlayStation 2 home-use game consoles and PSX DVD recorder/game consoles. Sony fabricates these chips at a group plant in Nagasaki Prefecture. The chips' ability to handle detailed computer graphics will improve the TV's image-processing capacity, leading to faster on-screen control for selecting the type of TV broadcasts or viewing image data stored on digital or video cameras.
Sony is co-developing the next-generation Cell microprocessor with IBM Corp of the US and Toshiba Corp, and has announced its plans to use the Cell chip not just in its next-generation game console but in a gamut of digital home electronics. The Cell chip is not expected to be ready for mass production until 2005.

+RFSTREAM TO INTRODUCE DIGITAL TV TUNER FOR CELL PHONES

(Nikkei Electronics Asia, August 10) RfStream Corp of Japan revealed that it will introduce a silicon tuner module for analog/digital TV broadcasting, the TW-1500-SX, at the end of 2005. The product will be 12mm x 12mm x 1.4mm, and power consumption for analog broadcasting receive mode is 100mW and digital broadcasting receive mode is 85mW. It revealed that it will introduce the TA-0500-ST for terrestrial analog TV broadcasting tuners in December 2004. The TA-0500-ST is targeted to be built into notebook PCs.

+HONDA DEVISES SYSTEM TO WARN DRIVER OF APPROACHING PEDESTRIANS

Honda developed the world's first pedestrian-warning system that uses "far infrared" cameras to detect pedestrians at night and gives the driver visual and audio cautions to prevent pedestrian-related accidents. The Intelligent Night Vision System uses images obtained from two far-infrared cameras positioned in the lower section of the front bumper to detect the position and movement of infrared heat-emitting objects and determine whether they are in or approaching the vehicle's path. The system also determines whether the detected object is a pedestrian based on its size and shape, according to Honda.

+SOFTBANK, EACCESS TO ESCALATE TESTING OF TDD CELL PHONE SYSTEMS

(The Nihon Keizai Shimbun, August 20) The two DSL providers plan to step up their testing of next-generation cell phone systems by this fall. The companies are working toward launching TDD (time division duplex) cell phone services, which are suitable for high-speed data communications.
With the NTT Communications Corp-Multimedia Research Institute alliance also looking to enter the market, the 15GHz band, which the ministry plans to allocate for TDD services, is seen as too thin to fully accommodate the expected demand. Softbank has been gathering rudimentary data using three base stations in Tokyo.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+NEW ARTIFICIAL SKIN

(nikkei.co.jp, Aug 12th): A research team at the Kitasato University R&D Center for Artificial Skin, has developed a collagen-based artificial skin for treating wounds and burns. The new material is a spongelike substance which acts as a base for culturing human skin cells. The artificial skin is placed over the wound and provides a protective, nurturing covering until the patient's own skin regenerates. Tests on over 350 patients showed that in 90% of cases, the artificial skin was effective. In the other 10% of cases, severe prior infection prevented the wounds from healing.