<<<< Japan High-Tech Update>>>>
A monthly review of the latest developments in Japan’s IT, telecom, and life sciences sectors

September 2004 - Volume VII, Issue IX

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

Dan's Desk

From Triangle's CEO

Dear friends:

In order to effectively sell a product to someone, it helps to know how that someone thinks and acts, correct? It helps to know how decisions are made, right? What the buyer's values are? Well, the other day I was browsing in my Japan-book library and noticed a book I had not read in a long time, called Working for the Japanese, by Joseph and Suzy Fucini (1990, Free Press). I am SURE NONE of my Dan's Desk readers out there has read this obscure text! Working for the Japanese is the story of the establishment of a Mazda plant in Flat Rock Michigan in the mid-late 1980's, and an apparently thorough and objective piece of research. Here are some tidbits:

"Japanese culture, with its emphasis on self-sacrifice, respect for authority and social cooperation, had … provided fertile ground for…a management system that required workers to commit themselves so completely to job and company. But the United States, with its…self-gratification, individualism, and competitiveness, is in many respects the cultural opposite of Japan." p 41.

"The distinction between mandatory and voluntary, between implicit and explicit, [was different]…there is no real difference between 'should do' and 'must do…Refusing the call to volunteer…would be taken as a ..sign of disrespect." p.44

"Not only would workers be invited to contribute ideas on the shop floor, they would also be given a voice in making higher level decisions." p. 69

The three M's - muda, mura, muri. Muda = Waste (excess); Muri = inconsistent use of resources, Mura = excessive demands. (p. 76-78). These are three of the elements that kaizen strives to eliminate.

"The Japanese refused to accept the sharp distinctions that Americans drew between personal and work time,. And between individudal and company interests…to the Japanese… a worker belonged to the company… [and] … responsibility did not end when the quitting bell rang..." p. 105

" The idea of placing anything short of a life-threatening family crisis over his obligation to the company would strike the Japanese worker as completely disloyal and selfish." p. 115 "the individual is expected to sacrifice his or her own interests or comfort or pride to the good of the group at a Japanese company." p. 222

"It means conforming to a group way of thinking, of not only doing what one is told but of wanting to do what one is told. Everyone must agree with a consensus decision….Everone must have the 'will to participate'." p. 223

Interesting, huh?

Good luck,

Dan

***TRIANGLE TECHNOLOGIES NEWS***

Mempile Inc. has entered into a strategic alliance with one of Japan top media products companies. Under this Agreement, the Japanese party will serve as one of the distributors and future manufacturers of those products in Japan

ISRAEL-JAPAN NEWS

+NEW JAPANESE AMBASSADOR TO ISRAEL

On September 6th, the new Japanese Ambassador Mr. Jun YOKOTA met the Friendship Society. Mr. YOKOTA, a graduate of Tokyo University, is coming to our country after a long and diversified service in Singapore, Geneva, and Hong-Kong as well as in various departments of the Japanese Foreign Affairs Ministry.

+RESEARCH FOR ISRAELI INVESTORS IN JAPAN

Clal Finance Batucha Investment Management has conducted a comprehensive research about the Japanese economy and investment opportunities for their investors. We will attach this report in a separate message addressed to the subscribers of this Newsletter. We would like to thank Mr. Ron Israeli of the Clal Batucha Macro Economy & Strategy Department (tel 03-6251039) for sharing with us this report.

+SEMINAR ON INVESTMENTS

The Israel Japan Friendship Society and Chamber of Commerce will conduct, on October 20th, a seminar on “Japanese Capital Investments and Cooperation in Israel”. For further details please contact the chamber at (03)5163383.

***BUSINESS NEWS***

+CAPITAL SPENDING BY JAPAN FIRMS UP 10.7% IN APRIL-JUNE

(Kyodo, September 6th): Capital spending by Japanese companies rose 10.7 percent in the April-June quarter on an all-industry basis from a year earlier, according to a Finance Ministry survey.
Manufacturers spent 5.6 percent more on plants and equipment than they did a year earlier, while nonmanufacturers spent 13.0 percent more.

+JAPAN SLOWDOWN LIKELY TEMPORARY, ECONOMY TO PICK UP AGAIN IN 2005

(AFP, September 5th) - Recent weaker than expected economic indicators do point to a slowdown in Japan's hard earned economic recovery but this is likely to prove only temporary and it should pick up again by mid-2005, analysts said. Recent data showing a slowdown in growth in the second quarter and unemployment in July rising to 4.9 percent from 4.6 percent in June.
The consensus view of 14 think-tanks and brokerage houses in Japan put growth in the year to March 2005 at 3.5 percent, followed by 1.7 percent in the year to March 2006. The economy grew 3.3 percent in the year to March 2004, the fastest rate since 3.6 percent in the year to March 1997.

+JAPAN'S IC CARDS SEEN HITTING 340 MILLION IN FISCAL 2010: YANO FORECAST

(Nikkei Computers, August 27) -- Yano Research Institute Ltd said in its latest survey that the number of IC cards, including bank cards, credit cards and commuter passes, should swell to 340 million in fiscal 2010. The Japanese IC card market increased 46.9% from a year ago to 51.18 by category, bank cards and credit cards won a lion's share of 58.6.

+YANO ANNOUNCES RESULTS OF CAR NAVIGATION SYSTEM MARKET SURVEY

(JCNN, September 6th) - Yano Research Institute announced the results of a survey on car navigation system markets in Japan, Europe, and the US. The survey of 50 companies including automakers, car navigation system makers, car electronics makers, software vendors, device makers, and service providers show that the Japanese market may exceed 3 million systems in 2004, up from 2.8 million systems in 2003. The European market reached 1.4 million units last year, of which Germany accounted for approximately half. The US market topped the 400,000 mark last year.

+HOUSEHOLDS IN JAPAN ARE POORER IN SAVINGS THAN LAST YEAR, THE FOURTH YEAR IN A ROW OF DECLINE

(IHT/Asahi: September 20,2004) - The average household had financial assets of 10.22 million yen this year, marking the fourth consecutive yearly drop in savings, the survey by the Central Council for Financial Services Information showed. And one-fifth of households don't have any savings at all. Debt is also on the rise, the average household owed 4.93 million yen.
As for retirement, about 80 percent of respondents said they are worried about how they will afford to live. More than 70 percent said they do not have enough savings.

+3G BAND TO OPEN UP

(nikkei.co.jp, Sep 26) - The Ministry of Internal Affairs and Communications has announced that it will open up part of the 1.7GHz band for exclusive use by 3G cell phone services -- enough to provide services to 15m more subscribers. The move is good news for Softbank, which has been pushing for a frequency allotment of some type. Apparently the new players will have to choose between either of the existing two 3G communications standards: W-CDMA or CDMA2000. The ministry will create a task force in October and the bandwidth will be allotted in FY2005. Currently Japan's mobile communications market is worth JPY8trn ($72bn) a year.

***GENERAL TECHNOLOGY NEWS***

+NEW CONCEPT FOR NTT DOCOMO HANDSET CHIPSET

(Nikkei Electronic, September 27) - NTT DoCoMo Inc will invest a total of 7 billion yen in Renesas Technology Corp and 5.5 billion-yen investment in Texas Instruments Inc over three years from fiscal 2004 to 2006 to promote technology development.
NTT DoCoMo has proposed to each of the two companies to jointly develop single-chip LSIs that would integrate the baseband function for W-CDMA and GSM/GPRS with the CPU core (application processor), which is mainly responsible for executing applications. NTT DoCoMo plans to use Symbian and Linux as the operating systems for FOMA phones.

+KOITO AND DENSO DEVELOP THE WORLD'S FIRST MERCURY-FREE HIGH-INTENSITY DISCHARGE HEADLAMP SYSTEM

KOITO Manufacturing Co., Ltd. and DENSO Corporation have developed, along with Toyota Motor Corporation and Royal Philips Electronics, the world's first mercury-free high intensity discharge (HID) headlamp system. This system completely eliminates mercury from discharge lamps (bulbs). In 2003, about 20 percent of new vehicles had the HID discharge system in Japan.
KOITO and Philips developed the mercury-free discharge bulb using a mercury substitute. KOITO and DENSO developed the ballast for lighting the mercury-free discharge bulb; The companies claim that ballast achieves an approximate 50 percent reduction in volume and 25 percent weight reduction over conventional ballasts achieved these reductions by increasing the switching frequency of the DC-DC converter contained in the ballast and enhancing the heat resistance of the ballast.

+MATSUSHITA TO OFFER WORLD'S LARGEST CONSUMER PLASMA DISPLAY

(The Nihon Keizai Shimbun, September 6) - Matsushita Electric Industrial Co Ltd said that it will release on Oct 1 the world's first consumer 65-inch plasma display. Designed for households with high-end home theater systems, the TH-65DX300 will not come equipped with a television tuner or speakers. The new plasma display, which is to become the top-end model of the company's Viera flat-panel TV series, will feature a 143.4cm x 80.6cm screen and weigh 109kg including the stand. It will be capable of reproducing 3.62 billion colors and clearly showing even dark sections of images. The product is expected to sell for 2.07 million yen. Specially designed speakers will also be available at 87,150 yen. Matsushita plans to make 500 units of the TH-65DX300 a year at its factory in Ibaraki, Osaka Prefecture.

+PECCELL ACHIEVED 4V VOLTAGE IN SENSITIZED SOLAR CELLS

(JCN Newswire, Sept 15) - Peccell Technologies, Inc., a developer of a film-type dye-sensitized solar cells (DSC), has achieved a high voltage of over 4V - equivalent to that of a lithium ion battery - under illumination. The electrode of the DSC is made of titanium oxide paste, which is based on fine particles (any size between 10 and 500 nm) of titanium oxide supplied by Shoa Denko KK (SDK). The paste is applicable to both film-type DSCs for portable applications and conventional glass-substrate DSCs.
Peccell led by Prof. Tsutomu Miyasaka, Department of Biomedical Engineering, Faculty of Engineering, Toin University of Yokohama, was established in March 2004 for the development of DSC-related technologies.
A film-type DSC is expected to be used as power source for portable IT devices (cellular phones, PDA), for household goods (interior, exterior), and for outdoor applications (displays; automotive, agricultural and environmental goods). The size of the Japanese market for film-type DSCs will amount to around JPY 200 billion a year.

+AIST DEVELOPS FUEL CELL TECHNOLOGIES

(JCNN, Sep 17) - The National Institute of Advanced Industrial Science and Technology (AIST) announced that it has developed a new technique to synthesize organic hydrogen for fuel cells. Using supercritical carbon dioxide (CO2) and supported rhodium, a catalyst, the new approach can produce organic hydrogen with high selectivity and high yield. Compared to the conventional techniques, the new system substantially reduces reaction temperature to 60 deg C.

+IMMERSION WINS PATENT CASE AGAINST SONY

(AP Technology, Sep18) - Immersion Corp., a small firm that develops and licenses touch-related technologies, has been awarded $82 million after winning a patent infringement lawsuit against PlayStation maker Sony Corp. The suit first filed in 2002.
A federal jury agreed that Sony's popular videogame consoles as well as its DualShock controllers and 47 games infringed on two Immersion patents. The panel, however, did not find the violations to be willful, a factor that could have tripled damages.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+ONLINE PHARMACIES

(Asahi.com, September 3rd): Net pharmacies are flying high, but the health ministry, worried about safety, wants to bring them down to earth. For the moment, however, officials' hands are tied. No laws exist for limiting online sales because the current rules on the distribution of mail-order medicines were laid down before the Internet boom.
Already, about 100 companies, ranging from mom and pop dispensaries to established drug firms are thought to have entered the market.

+SONY DEVELOPS BIODEGRADABLE SMART CARD

(The Nihon Keizai Shimbun , September 2nd): -- Sony Corp announced that it has developed a contactless smart card made from biodegradable plastic. Sony claims this is the first time a contactless smart card has been made from plant-derived plastic instead of the typical oil-based plastics that do not decompose. However, the company added that it has not set a timeframe for actual use of the material for smart cards, since cost remains an issue.
The smart cards are made from a material developed by Sony in cooperation with Mitsubishi Plastics Inc. The material is made from polylactic acid mixed with special additives.

+SHOWA DENKO DEVELOPS NEW CATALYST FOR TETRALONE SYNTHESIS

(JCN Newswire, Sept 1) - Showa Denko K.K. (SDK) has developed a new catalyst for synthesizing alpha-tetralone, an important intermediate in the production of pharmaceuticals and agrochemicals. The catalyst is the fruit of SDK's participation in the national project for developing new solid acid catalyst processes, which forms part of "Development of Next-Generation Chemical Process Technology" program implemented by the New Energy and Industrial Technology Development Organization (NEDO) and the Japan Chemical Innovation Institute (JCII).
Having both a benzene ring and six membered cyclic ketone in its molecular structure, alpha-tetralone is used for the synthesis of carbaryl (insecticide) and sertraline (antidepressant). The world market for sertraline is approx. 300 billion yen per year. Thus, the market for alpha-tetralone as a pharmaceutical/agrochemical intermediate is expected to exceed 5 billion yen a year.
Currently, alpha-tetralone is being produced using metallic reagents, such as aluminum chloride, and through multi-stage reaction processes. Since this production method results in a large volume of wastes, it has been pointed out that a more environment-friendly production method is necessary.

+JAPANESE RESEARCHERS DISCOVER PROTEIN UNFOLDING FACTOR

(Kyodo, September 21st) - A group of Japanese researchers have discovered a protein-unfolding factor that they hope will be used to combat mad cow disease and other protein-caused malignant diseases.
The discovery of the factor named "Unfoldin" was made by the researchers' group led by Naomi Hachiya with the National Institute of Neuroscience in Kodaira.
Unfoldin unfolds abnormal prion protein, the chief cause of mad cow disease, formerly known as bovine spongiform encephalopathy, or Creutzfeldt-Jakob disease, the researchers said.

+ACTION NEEDED TO COUNTER SHARP RISE IN RUBELLA CASES

(Yomiuri Shimbun, September 21st) - The incidence of rubella, which can cause congenital problems in fetuses if contracted during the early stages of pregnancy, hit an alarmingly high rate this year, according to a study team of the Health, Labor and Welfare Ministry. The number of reported cases of the disease, commonly known as German measles in the West and fushin in Japan, reached 3,812 in the nation as of the end of August-800 more than the total for 2003, the study team said.
Rubella is commonplace and easily infects infants. Symptoms, such as a rash that disappears in a few days, generally are mild. But the transmission of the disease from a mother to her unborn child can result in congenital rubella syndrome (CRS), which causes such problems as heart disease, deafness and cataracts.