Semiconductors
Renesas Technology Corp. will nearly double its production of high-power amplifiers (HPAs) for mobile phones this year to keep pace with growing demand. The company is planning to produce 38 million units per month in fiscal 2008, 90% more than in fiscal 2007. The increase will be achieved with minimum capital spending by altering the product mix and increasing outsourcing of preparatory operations such as burning circuits onto substrate materials. HPAs are semiconductors that amplify power so that handsets can send strong signals.
Altair Semiconductor, the developer of advanced 4G mobile semiconductors for handheld devices, said it has been selected to supply chipsets for wireless devices operating on WillcomÆs next generation Personal Handyphone System in Japan. Willcom will deploy its PHS network using orthogonal frequency-division multiplexing access (OFDMA) technology that is designed to achieve higher capacity and lower cost per bit compared with traditional 3 and 3.5G cellular technologies.
Mobile/Wireless
PHS service operator Willcom aims to attract more Japanese subscribers with its next-generation personal handyphone system and new handsets. Willcom has branded the new PHS service Willcom CORE. Slated for launch next April in Tokyo, it will feature speeds of several tens of megabits per second. The company intends to expand the service by the following fall to all major cities, while also ultimately boosting the transmission speed to 100mbps and beyond. PHS handsets are currently far slower than cell phones, but next-generation PHS will not lose out on speed.
Hardware
Sony has signed an agreement with the top US cable companies that leads the way for televisions to receive digital signals without the need for a television set-top box. US cable television customers currently use set-top boxes, which are made by companies such as Motorola or Cisco Systems, the owner of Scientific Atlanta. Other consumer electronics companies have also been invited to formally join the memorandum of understanding Sony negotiated with Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks.
Hitachi aims to slash its annual cost of procuring basic materials and components by Ñ300 billion ($2.9 billion) to help it cope with surging crude oil and commodity prices, and to achieve its profit ratio commitments for the year to March 2010. Hitachi plans to cut overhead costs by Ñ15 billion, while setting aside Ñ5.0 billion in cash and cash equivalents to cover the rise in borrowing costs. Huge assets will be tapped to improve its cash flow by Ñ5.0 billion, the company said, although it did not specify whether it was planning to sell any of its assets.
Korea
Telecommunications
Datang Telecom Technology said it will expand its cooperation with SK Telecom in order to develop value-added TD-SCDMA services that are in line with China's 3G standard. Chen Shanzhi, spokesman of Datang Telecom, disclosed that the two companies will cooperate on developing TD-based 3G content applications in South Korea and that they will introduce SK Telecom's advanced 3G technology on China's 3G network.
Semiconductors
Hynix Semiconductor is seeking to recover several billion won from Japan for duties paid that were later ruled illegal by the World Trade Organisation. Hynix filed a request to the Japanese government to return tax payments made since January 2006. The WTO has ruled that Japan must abolish the duty by September 1 this year. In November, WTO appeals judges backed an earlier ruling that the 27.2% tariff imposed by Japan on Hynix's semiconductors was illegal. The taxes were introduced following complaints from Japanese chipmakers including Elpida Memory.
Hynix Semiconductor said it will reduce capital investment for this year by 28% to W2.6 trillion ($2.5 billion). The company joins Qimonda and Nanya Technology Corp. in reducing spending for production increases, helping prices recover. The price of the benchmark DRAM chip has gained 12% this quarter after remaining at near record lows since sliding 85% last year, according to Taiwan-based Dramexchange Technology, Asia's biggest spot market for semiconductors.
Samsung Electronics predicts prices may recover later this year as the oversupply eases. Memory chip prices are no longer cost efficient. Still, the industry outlook for the second half remains unclear. Samsung's statement backs Deutsche Bank's forecast that the industry has bottomed and will recover through 2009 because of a significant slowdown in supply growth. Prices of dynamic random access memory (DRAM) chips have rebounded in the past two months after a glut drove major producers, including Samsung, to post losses for the product last quarter.
Samsung Electronics also plans to invest W946.8 billion ($902.2 million) in upgrading memory lines this year. The spending is part of the South Korea-based company's 2008 investment plan of a combined W11 trillion, of which 64% are earmarked for memory products such as DRAM and flash chips. Samsung said in a filing to the Korea Exchange that the spending will help maximise production and improve cost competitiveness. The company also said it has developed a new solid state drive (SSD) which is expected to replace hard disk drives in laptop computers. Samsung said its 256-gigabyte SSD for data storage is 2.4 times faster than traditional hard drives. The company plans to begin production of SSDs this year. The new SSD represents a bold step in the shift to notebooks with significantly improved performance and larger storage capacities.
Hardware
LG Electronics said it too may have to cut its handset prices if Nokia makes the first move. There is market talk that Nokia, the world's largest handset maker, may cut its prices for select cell phone models by up to 20% to grab some US customers away from Motorola. The speculation has fuelled worries that Nokia's weaker rivals, including LG and Samsung Electronics, may be forced to follow suit at the expense of profitability.
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