Japan-U.S. Business Report

No. 328, January 1997

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Japanese Companies in the United States


American Companies in Japan


Japanese Companies in the United States


CHEMICALS

Expanding demand from the Big Three U.S. automotive manufacturers for polyolefin foam, used in instrument panels, door panels and other vehicle interior plastic parts, has prompted TORAY INDUSTRIES, INC. to plan the expansion of its Front Royal, Virginia polyolefin foam plant even before that facility comes on-line. The roughly $60 million factory, capable of producing on an annual basis 3,000 tons of both polyethylene and polypropylene foam, is scheduled to begin operations this spring. The addition of a second produc-tion line, devoted mainly to more sought-after polypropylene-based materials, could cost $35.1 million.

A trio of Japanese companies will take a controlling interest in Abingdon, Virginia-headquartered METTON AMERICA INC., which makes a thermal liquid molding agent. TEIJIN LTD. and NICHIMEN CORP. now own 40 percent of the company, which has its production facilities in LaPorte, Texas; 21ST CENTURY CONTAINERS, LTD. owns the rest. The Japanese investors will bring in MARUZEN PETROCHEMICAL CO., LTD. as a partner and together increase their stake to 65 percent by investing $4 million. Under the new ownership/management arrangement Teijin will provide technical assistance to Metton America, Maruzen Petrochemical will supply the main raw material for metton and Nichimen will handle marketing of the product in the United States and Europe. DAIKIN INDUSTRIES, LTD. hopes to expand its share of the American market for water repellant agents to 20 percent by the year 2000 from 5 percent or so now. Starting in January, the company switched to direct marketing of the fluorine-based product from sales through trading companies. Daikin also has launched a yearlong study of the feasibility of making water repellant agents here; it already produces polytetrafluoro- ethylene resins in Decatur, Alabama. MINNESOTA MINING & MANUFACTURING CO. and E.I. DUPONT DE NEMOURS & CO., INC. currently control 90 percent of the U.S. water repellant agent market.

Continuing to expand outside its core photosensitive materials business, FUJI PHOTO FILM CO., LTD. has acquired for about $8.9 million TENNESSEE VALLEY PERFORMANCE PRODUCTS CO. The Dayton, Tennessee- based company makes catalysts, additives and additional specialty products for sale to other chemical manufacturers. Fujifilm believes that the technical expertise of the renamed FUJI HUNT SPECIALTY PRODUCTS CO. is applicable to its own film and developer chemicals lines as well as to pharmaceuticals.

KAINOS LABORATORIES, INC., a supplier of clinical regents for biochemical and immune serum studies, has invested $1 million in BEACON DIAGNOSTICS, INC. The Foster City, California company's first product is the OraScreen HIV Rapid Test, a point-of-care saliva-based test that detects within 15 minutes whether the human immunodeficiency virus is present. As part of the deal, Kainos received marketing rights in Japan to the HIV test as well as to two hepatitis tests that Beacon has under development. The two companies will collaborate on commercializing the tests for the diagnosis and the management of hepatitis.

Kumamoto, Kumamoto prefecture-based DOJINDO LABORATORIES, INC., a maker of organic analytical and biochemical reagents as well as chelating agents and metal indicators, has opened a subsidiary in Bethesda, Maryland. That step is preparatory to setting up a laboratory somewhere on the East Coast in the year 2001. By then the company expects to have 10 researchers on staff. The lab will focus on biochemical reagents.

EISAI CO., LTD. has licensed development and marketing rights to an oral broad-spectrum antifungal agent for the treatment of systemic fungal infections to BRISTOL-MYERS SQUIBB CO. Code-named ER-30346, the product is said to represent a promising advance in antifungals for the treatment of immunocompromised patients; they are at risk for developing serious fungal infections. BMS has exclusive worldwide rights to ER- 30346 outside of Japan, where it will work with Eisai on development and marketing. The U.S. firm will make up-front and milestone payments as well as pay royalties on sales after marketing starts.

An exchange rate of ¥114=$1.00 was used in this report.

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COMPUTERS AND PERIPHERALS

Although it just recently completed a $28 million recordable compact disc plant in Colorado Springs, Colorado (see Japan-U.S. Business Report No. 320, May 1996, p. 3), MITSUI TOATSU CHEMICALS, INC. already has announced plans to double the factory's output to 1.6 million CD-Rs a month. Production will start in February. The additional capacity should be ready for operation by the fall.

PERSONAL MEDIA CORP. and SUN MICROSYSTEMS INC. have debuted the ITRON real-time operating system running on a microSPARC-II-powered SPARCengine 5 board (see Japan-U.S. Business Report No. 321, June 1996, p. 2). The product is designed for embedded applications in the internetworking, office automation and consumer fields.

An exchange rate of ¥114=$1.00 was used in this report.

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ELECTRIC MACHINERY

Another manufacturing operation soon will be added to the large number of U.S. plants already run by MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. Along with affiliate MATSUSHITA INDUSTRIAL EQUIPMENT CO., LTD., MEI has set up a company in Elmhurst, Illinois to produce motor- running capacitors for refrigerators, air conditioners and dishwashers. These capacitors play an important role in energy efficiency. MATSUSHITA INDUSTRIAL EQUIPMENT CORP. OF AMERICA, in which MEI has a 40 percent stake, will launch production in April. Its output will replace products exported from Japan. Research and engineering functions also will be located at the Illinois site.

Tokyo-headquartered KYODEN CO., LTD., a designer and maker of printed circuit boards, expects to have a U.S. plant ready for operation in the spring of 1998. The firm has earmarked $7 million for first-phase work on the facility, most likely to be located in the Southwest. Staffed by anywhere from 70 to 100 people, the factory is projected to turn out $12 million worth of products in its initial year of operation. Kyoden already has an office in San Jose, California for market research.

A company formed by such heavyweights as MA-TSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and TOYOTA MOTOR CORP. to manufacture nickel- metal hydride batteries to power electric vehicles reportedly will supply its product to FORD MOTOR CO. for use in the electric car that the number- two automotive maker will market in California in the 1999 model year. Ni-MH batteries provide a longer driving range per charge than competing lead-acid batteries.

The holding company for SANYO ELECTRIC CO., LTD.'s U.S. businesses has opened a multimedia product development center in Mountain View, California. In addition to research, Sanyo Multimedia Center U.S.A. will try to bring to market more quickly such promising multimedia products as next-generation digital television sets and personal digital assistants. It also will license Sanyo technology to American companies and pursue collaborative relationships with Silicon Valley firms. On start-up the center had a staff of 20.

The creator of Final Fantasy plans to introduce in late 1997 a U.S. version of the latest release of the role-playing video game. SQUARE CO., LTD. expects to sell 1 million copies of Final Fantasy VII in the first year of marketing. It will be available for SONY CORP.'s PlayStation. Although well-established in Japan's video game software business, Square only recently moved into this market. Its initial entry was Tobal No. 1.

An exchange rate of ¥114=$1.00 was used in this report.

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FINANCE

DAI-ICHI MUTUAL LIFE INSURANCE CO. reduced its holding in financial services provider LINCOLN NATIONAL CORP. during 1996. At the start of the year the insurer owned about 8 percent of the New York City-based company, a stake acquired when it bought preferred shares in 1990 and 1992 and later converted them into common stock. By yearend Dai-Ichi Mutual's share was roughly 6.5 percent, although it still was Lincoln National's second-biggest investor.

An exchange rate of ¥114=$1.00 was used in this report.

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FOOD AND AGRICULTURAL PRODUCTS

After an 18-month search, KIKKOMAN CORP. has selected Folsom, California as the location of its second U.S. soy sauce plant. Work on the facility, which is expected to cost between $35 million and $40 million, is slated for February. Shipments are scheduled to start in the fall of 1998. They will go to customers in the western United States and Canada. Kikkoman's Walworth, Wisconsin plant, open since 1973, will supply the rest of the country. The new factory will have the capacity to make 2.6 million gallons of soy sauce a year. The Wisconsin plant can turn out 18.5 million gallons annually.

NICHIREI CORP. has lined up COLUMBIA FOODS INC. to supply it with frozen organically grown vegetables. The Quincy, Washington firm will use about 3,000 acres of land to grow corn, peas, potatoes, green soybeans and other vegetables for the food processor. Only natural fertilizers will be applied to the crops, which will be produced on land free of chemicals for more than three years. With the new supply source, Nichirei expects to be selling 11,000 tons of frozen organic products annually within two years versus less than 2,200 tons in the year through this coming March.

An exchange rate of ¥114=$1.00 was used in this report.

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METALS AND FABRICATED PRODUCTS

Strong automotive industry demand for corrosion-resistant products is behind a KOBE STEEL, LTD.-USX CORP. study of the feasibility of adding a second line for hot-dipped galvanized steel sheets at equally owned PRO- TEC COATING CO. in Leipsic, Ohio. The four-year-old plant already is running above its rated annual capacity of 600,000 tons of coated sheets. If built, the new line would be able to turn out 400,000 tons a year. The project could cost between $87.7 million and $131.6 million. A decision is expected soon since, if the verdict is favorable, the partners want to have the extra capacity available in time for the 1999 model year.

SUMITOMO ELECTRIC INDUSTRIES, LTD. and VALENITE INC. have signed an original equipment manufacturer cross-supply agreement covering hard- metal tools and related products. SEI will provide cermet (a combination of ceramics and metal) tools, high-speed drills and other carbide products to the Madison Heights, Michigan-based firm, which, in turn, is expected to supply cartridges, micro units and other steel products to the Japanese company. Sales, which will go through SEI's and Valenite's respective worldwide marketing channels, could start this spring. The first-year sales goal for each firm is $1.8 million.

An exchange rate of ¥114=$1.00 was used in this report.

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NONELECTRIC MACHINERY

Hoping to win more of the homeowner lawn mower market, HONDA MOTOR CO., LTD.'s Swepsonville, North Carolina-based lawn mower subsidiary will develop two moderately priced products for sale through more than 400 HOME DEPOT INC. stores. Honda expects to spend $4.4 million in FY 1997 to commercialize a push mower and a riding mower, each priced in the $300 to $400 range. The new products will go on sale under the Honda name in the spring of 1998.

MAX CO., LTD. has a two-year contract to supply a computer-based sign-making system to the SignMark division of BRADY USA, INC. The Milwaukee, Wisconsin-based firm will sell the Bepop LC-100 Series under its own Graphics Pro label. The unit is expected to be priced around $3,800. First-year sales are projected at $2.6 million. Max hopes to use its Brady connection to bring other sign-making products to the U.S. market.

An exchange rate of ¥114=$1.00 was used in this report.

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PHOTO EQUIPMENT AND COPIERS

KATSURAGAWA ELECTRIC CO., LTD., a Tokyo-headquartered maker of large copying machines and microprinters, has purchased for $2.6 million the 60 percent of distributor SHACOH USA INC. that it did not own already. By making the Walled Lake, Michigan company a wholly owned subsidiary, the Japanese firm hopes to strengthen North American sales of its digital copying machines.

An exchange rate of ¥114=$1.00 was used in this report.

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PRECISION AND MEDICAL EQUIPMENT

Starting in 1998, the Illinois state highway administration will use electronic toll collection equipment produced by automotive parts manufacturer DENSO CORP. The system allows drivers with the appropriate equipment in their vehicles to pass through toll booths without stopping to pay the charges. Antennas installed on the toll booths read from vehicle recording devices the distance the driver has traveled; the appropriate toll then is deducted automatically from a bank account or a prepaid card. Denso will supply 125,000 vehicle devices, plus 250 antennas to be placed on 62 toll booths around the state.

An exchange rate of ¥114=$1.00 was used in this report.

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SEMICONDUCTORS

MITSUBISHI ELECTRIC CORP. is providing an 8-megabit flash memory based on its DINOR MobileFlash architecture to MOTOROLA INC. for resale. The strength of the DINOR technology is said to be that it combines the operating speed of NOR-type flash memories with high storage capacity and low power consumption. Motorola is marketing the flash device in the United States, Japan and elsewhere for use in such low-voltage, portable products as cellular telephones. Later in 1997 the U.S. firm will start assembling the part from MELCO-supplied bare die. MELCO and Motorola also recently agreed to exchange memory and microprocessor technologies (see Japan-U.S. Business Report No. 326, November 1996, p. 6).

Just months after opening its first offshore production facility -- a Hillsboro, Oregon plant that makes chemical vapor deposition systems (see Japan-U.S. Business Report No. 325, October 1996, p. 5), TOKYO ELECTRON LTD. has unveiled an ambitious plan to expand U.S. manufacturing. By early 1998 the company, one of the world's biggest producers of semiconductor manufacturing equipment, expects to have a factory in operation adjacent to its American marketing subsidiary in Austin, Texas. That plant will make photosensitive materials coaters and developers at a monthly rate of 30 to 40 machines. By the end of 1998 TEL also hopes to have a facility in the suburban Boston, Massachusetts area for etching equipment; its technology division already is located in the city.

Mobile robots or automated guided vehicles made by SHINKO ELECTRIC CO., LTD. will be integrated into PRI AUTOMATION, INC. semiconductor factory intrabay automation systems sold in the United States, Europe and Asia. The Billerica, Massachusetts supplier of automated materials handling systems for wafer fabrication facilities has its own machine loading robot vehicles. However, these track-guided products are more appropriate for high-throughput bays with multilot batch tools, whereas Shinko Electric's free-roaming AGVs are best suited for lower throughput bays with a cross-aisle process flow.

An exchange rate of ¥114=$1.00 was used in this report.

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SOFTWARE AND INFORMATION SERVICES

Continuing to broaden its Internet-related business, acquisition- minded SOFTBANK CORP. has paid a reported $30.7 million to purchase 35 percent of TREND MICRO, INC., a developer of server-based virus protection software. Its products, which support NetWare and Windows NT as well as leading Unix-based operating systems, are designed for file servers, Internet and intranet gateways and electronic mail servers. The company bills itself as the leading antivirus vendor in Asia. Softbank is its main distributor there. In a virtually unprecedented move Trend Micro recently moved its headquarters from Cupertino, California to Tokyo in preparation for going public by listing its stock on the over-the-counter market sometime in 1998.

A trio of Japanese companies has acquired for $1.1 million a 13 percent stake in TRADE'EX ELECTRONIC COMMERCE SYSTEMS, INC., the operator of an Internet-based trading forum for computer equipment (see Japan-U.S. Business Report No. 320, May 1996, p. 14). Along with the Tampa, Florida-based firm, TOMEN CORP., MARUBENI CORP. and TOYO ENGINEERING CORP. plan to promote the electronic commerce system in Japan and elsewhere in Asia. The three new investors also hope to extend the range of products traded to those in which they are strong, such as steel, chemicals and electronic parts.

HITACHI, LTD. is working with CONCORD SOLUTIONS INC., an affiliate of BANK OF AMERICA, to develop an Internet-based home banking system. The product, which will enable banks and customers to communicate over the Internet, will be based on the TPBroker middleware that the electronics giant came up with in partnership with VISIGENIC SOFTWARE INC. of San Mateo, California. Hitachi and Concord expect to have the system ready for BA's use in August. They also will market it elsewhere at the same time.

MITSUI & CO., LTD. has purchased a 2 percent stake in SYMIX SYSTEMS, INC., a developer of software that helps midsized manufacturers and divisions of multinationals integrate management of production, financial and distribution functions. The trader has marketed and sold the Columbus, Ohio-based firm's products in Asia since mid-1995. It also runs the Mitsui/Symix Development Center in Tokyo.

ARMONICOS CO., LTD. of Inasa, Shizuoka prefecture -- which specializes in direct data translators or software that translates a model or a file developed in one CAD/CAE (computer-aided design and engineering) program into a model or a file for another CAD/CAE program -- has tied up with major CAE vendor MACNEAL-SCHWENDLER CORP. The Japanese organization is developing conversion software that will allow direct data exchanges between the Los Angeles, California-based company's CAE programs and leading three-dimensional CAD programs. Armonicos will supply the Direct Data Conversion Translator to MSC on an OEM basis for worldwide sale starting in March. It expects to receive an annual royalty of about $877,200.

With design help from SANESU MANAGEMENT SYSTEMS, Riverside, California-based I/O SOFTWARE, INC. has developed low-cost desktop videoconferencing software. Called eye2eye, it runs on Windows 95 and Windows NT 4.0 machines and requires no proprietary hardware. SanEsu Management Systems will market eye2eye, which will be released simultaneously in Japanese and English, in Japan and, through its California subsidiary, in the United States. The two-user version will be priced around $350.

An exchange rate of ¥114=$1.00 was used in this report.

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TELECOMMUNICATIONS EQUIPMENT

Japan's largest cable television operator, SUMITOMO CORP., has invested a reported $5 million in cable modem systems developer TERAYON CORP. In return, the trader received exclusive rights to distribute the Santa Clara, California-based company's TeraComm Data Network product line at home. Cable modem systems allow high-speed, high-capacity, two- way data communications over cable networks; Terayon's product is said to transmit 14 megabits of data per second, far faster than modems attached to telephone lines. Sumitomo plans to use the cable modems to upgrade the infrastructure of its affiliated CATV stations for two-way data services and market them to other companies. PIONEER ELECTRONIC CORP. and TOSHIBA CORP. have been tapped by TIME WARNER INC.'s cable television subsidiary to supply digital set-top boxes to its subscribers along with prime contractor SCIENTIFIC- ATLANTA, INC. The CATV operator expects to buy 1 million devices, with shipments starting in late 1997 and continuing for several years thereafter. Toshiba already has a contract from Time Warner Cable to provide all of the hardware and the software for two high-speed cable- based data services (see Japan-U.S. Business Report No. 326, November 1996, p. 6).

NIPPON TELEGRAPH AND TELEPHONE CORP. and KOKUSAI DENSHIN DENWA CO., LTD. were among the big communications carriers participating in a December test of the security and the reliability of data exchanges over interconnected networks. The experiment was conducted by the U.S.-based Multimedia Services Affiliate Forum, an organization of 42 major telephone companies and software vendors that also includes such major names as AT&T CORP. The group was formed in October 1995 to ensure safe, dependable global data communications.

An exchange rate of ¥114=$1.00 was used in this report.

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TRANSPORTATION EQUIPMENT

TOYOTA MOTOR CORP. has received permission from the Federal Aviation Administration to manufacture and market an engine for small aircraft codeveloped with the Hamilton Standard division of UNITED TECHNOLOGIES CORP. The reciprocating engine is a derivative of the 4000- cubic-centimeter V8 engine found in Toyota's high-end Lexus luxury cars. With this go-ahead, the automotive maker is weighing U.S. production of the engine. A subsidiary could be set up as early as this year. Beside its use in small airplanes, Toyota is considering making the engine for marine applications. The company intends to move into the U.S. recreational boating business in the near term. The Wellesley Hills, Massachusetts rail-car subsidiary of KINKI SHARYO CO., LTD. will supply the trains for the initial stretch of a northern New Jersey light-rail system. Last summer NEW JERSEY TRANSIT CORP. awarded a $1.26 billion, 18-year contract to build and operate the system to RAYTHEON CO.'s Raytheon Engineers & Constructors unit, which had tied up for the bidding with the Kinki Sharyo affiliate and the New York City rail-car subsidiary of ITOCHU CORP. The first section of the line will run 9.5 miles between Bayonne and Hoboken. Kinki Sharyo will supply 43 electric-powered units, each of which can carry 192 passengers, for this part of the system. Under the buy American regulations for federally funded transportation projects the company will source in the United States motors, control systems and other major components. Final assembly will be done locally as well.

In its first venture into the United States NIPPON WIPER BLADE CO., LTD. will build a $15 million plant near Petersburg, Virginia to make windshield wiper blades for selected automotive makes sold here and overseas. Work on the facility already has started. On opening this fall it will have a staff of 140. By 1999 another 60 people could be on the payroll.

SUNCALL CORP. now is the sole manager of SANKO-PETERSON CORP., a company formed with PETERSON AMERICAN CORP. on a 50-50 basis in 1989 to make transmission parts. Suncall currently has a 63 percent stake in the Richmond, Indiana-based manufacturer. Through an investment of $3.5 million that company will double its plant size and add four new products, including sensors for antilock braking systems and springs for seat belt systems. Production of these parts will be launched sequentially starting in the spring. Sanko-Peterson also hopes to win contracts from the Big Three U.S. vehicle makers to expand on the business it does with transplants.

TOKICO, LTD. expects to spend about $2.6 million to add a line at its Berea, Kentucky plant for vacuum servo mechanisms that are built into master brake cylinders. The factory now makes shock absorbers. The new line is to be completed in July. At full operation beginning in 1998 it will be able to turn out 20,000 mechanisms a month. This output will go to FORD MOTOR CO., although Tokico is seeking other customers among the transplants. By 1999 the Berea factory is projected to be doing $20 million worth of business a month.

By adding a third shift, INDIANA PRECISION TECHNOLOGY, INC. will boost output of injectors for electronic fuel injection systems to 260,000 units a month from 220,000 at present. The Greenfield, Indiana company is owned by HONDA MOTOR CO., LTD. and three of its parts suppliers, including KEIHIN SEIKI MANUFACTURING CO., LTD.

TAKATA CORP.'s Auburn Hills, Michigan-based subsidiary has received a multiyear, global contract from GENERAL MOTORS CORP. for seat belt systems for eight GM vehicle platforms. Takata's work will include the development and the integration of the seat belt systems into the vehicles' design as well as production and support. The contract will be filled from the company's plants in North America, Europe and Asia.

NGK SPARK PLUG CO., LTD., which makes both spark plugs and oxygen sensors in the United States, has inaugurated an $11.4 million technical center in Farmington Hills, Michigan. Its staff will work mainly on the development of engine-related parts. Similar technical centers will be opened in Germany and Japan to strengthen NGK's global parts development system.

An exchange rate of ¥114=$1.00 was used in this report.

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MISCELLANEOUS

Japan's largest maker of fire alarms has pulled out of the American market. At the end of 1996 NOHMI BOSAI, LTD. liquidated its U.S. holding company and sold its share of WESTEC SECURITY, INC. to SECOM CO., LTD.'s U.S. holding company for $44.2 million. In late 1994 Nohmi Bosai invested $41.6 million in the Newport Beach, California security services firm, then wholly owned by Secom, as part of a move to strengthen business ties with Secom, its largest shareholder. Nohmi Bosai executives said that the company wanted to concentrate on its fast-expanding joint venture with Secom in the People's Republic of China.

MITSUI & CO., LTD. is teaming up with the Smyrna, Georgia subsidiary of Japanese auctioneer AUCNET INC., which since 1994 has sold used vehicles in the United States via a satellite-based communications system developed in-house. Through the tie-up with the trader Aucnet hopes to expand the range of products it sells to such items as personal computers and real estate. People participating in the weekly used vehicle auctions enter their bids on terminals installed at dealerships. The terminals display information on the items for sale as well as pictures.

An exchange rate of ¥114=$1.00 was used in this report.

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American Companies in Japan


CHEMICALS

The expanded demand projected worldwide for semiconductor process gases has attracted the attention of AIR PRODUCTS AND CHEMICALS, INC. and petrochemicals manufacturer SHOWA DENKO K.K. They have formed a company to produce two fluorine gases -- tetrafluoromethane and hexafluoroethane -- at a plant Showa Denko now has under construction in Kawasaki, Kanagawa prefecture; commercial operations are scheduled for June. The Allentown, Pennsylvania-based firm is licensing fluorine compound technology to SHOWA DENKO AIR PRODUCTS CO., LTD., in which it holds a 40 percent share. The partners will split the output, used as dry etchants and chamber clean gases, according to their shares in the new company. Combined sales in the first full year of marketing are estimated between $61.4 million and $70.2 million.

In a complementary move AIR PRODUCTS AND CHEMICALS, INC. and its affiliate, number-two Japanese oxygen maker DAIDO HOXAN INC., have set up a company in Osaka to serve the local electronics industry. DAIDO AIR PRODUCTS ELECTRONICS, INC., in which the American partner has a 49 percent interest, will provide bulk gases, such as nitrogen, oxygen and argon; reactants, etchants and other specialty gases; and high-purity liquid chemicals. It also will offer environmental systems, along with gas cabinets and other equipment. Turnkey gas systems installation and similar services will be available as well. The joint venture will license certain technology from the U.S. company. It also will take over some existing Air Products and Daido Hoxan operations in Japan. The new firm forecasts sales of $61.4 million in the first year and $87.7 million in the third. Air Products competitor PRAXAIR, INC. also is trying to position itself better to serve Japan's huge electronics industry (see Japan-U.S. Business Report No. 325, October 1996, p. 9).

Early in 1997 E.I. DUPONT DE NEMOURS & CO., INC. and DOW CHEMICAL CO. will join forces with SHOWA DENKO K.K. to market elastomers in Japan. The big American multinationals will split 65 percent of the ownership of the new company, which also will handle research and development. The joint venture is an outgrowth of last year's merger of the worldwide elastomer businesses of DuPont and Dow and DuPont's existing relationship with Showa Denko on elastomers (see Japan-U.S. Business Report No. 321, June 1996, p. 7).

UNIROYAL CHEMICAL CO., INC., which recently announced a broad- spectrum acaricide that demonstrates a high level of efficacy against mites resistant to earlier products as well as excellent crop safety, will work with NISSAN CHEMICAL INDUSTRIES, LTD. to commercialize the code- named D-2341 for the local market. Japan is expected to be the first country where products containing D-2341 are launched. That could occur by the year 2001, with D-2341 formulations for use on apples, citrus, tea and other crops. Nissan Chemical will have exclusive Japanese distribution rights to these products.

Mountain View, California-headquartered PROTEIN DESIGN LABS INC. has awarded a worldwide nonexclusive license for an antibody to a specific target antigen to an unnamed Japanese pharmaceutical company. That firm, which will pay an up-front licensing fee of $1 million and royalties on prospective product sales, is developing the antibody for the treatment of autoimmune and related diseases. Clinical testing of a compound developed by GELTEX PHARMACEUTICALS INC. to control elevated phosphate levels in chronic kidney failure patients will be conducted in Japan by CHUGAI PHARMACEUTICAL CO., LTD. The Waltham, Massachusetts company's RenaGel is a polymer that binds and removes dietary phosphate from the intestinal tract without being absorbed into the bloodstream. Controlling phosphate levels in patients with chronic kidney failure is critical to preventing bone diseases.

An exchange rate of ¥114=$1.00 was used in this report.

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COMPUTERS AND PERIPHERALS

The Tokyo subsidiary of SILICON GRAPHICS INC. has supplied $4.4 million worth of hardware and software to TELEWAY JAPAN CORP., a domestic long-distance telephone company that plans to launch in April a multimedia communications service known as Sirius. Covered by the contract are 19 Challenge network servers and 11 Indy workstations. This equipment will provide the backbone for both an individual dial-up service and a corporate dial-up service that will provide LAN (local area network) and Internet connectivity with the customer's own lines.

Hoping to extend its inroads into Japan's high-end server and workstation markets, SILICON GRAPHICS INC.'s local unit has signed a systems integration and client support agreement with TOSHIBA ENGINEERING CORP. That firm will focus on the multimedia market. The new partners also will work together in the computer graphics area.

Meanwhile, SILICON GRAPHICS INC.'s subsidiary absorbed effective January 1 the local unit of CRAY RESEARCH, INC. The two companies had been operating side by side since last year's acquisition by SGI of most of the supercomputer manufacturer's business. The new firm has a staff of about 460 people at Tokyo headquarters. It is projecting revenues of $482.5 million to $526.3 million in the year through June 1997.

Through its Tokyo subsidiary NCR CORP. has delivered to printing machinery manufacturer RISO KAGAKU CORP. a WorldMark 5100 system for data warehouse construction. The $877,200 symmetric multipro-cessing enterprise server has four processors and a 48-gigabyte hard disk capacity. It is equipped with NCR's data warehousing software, TeraData. The server, on which Riso Kagaku plans to store five years of detailed information on sales by customer, products and other internal data as well as information from outside the company, will be accessible from 85 sites around Japan.

Separately, NCR CORP.'s local affiliate has delivered to SEIBU DEPARTMENT STORES CO., LTD. an OLE (object linking and embedding) point-of-sales system based on Windows NT. The WinPOS21 system is said to be the first in the world to incorporate the OLE-POS technology, which standardizes control procedures across PCs, peripherals and POS software. Seibu expects to spend $21.9 million by this spring to install 2,100 WinPOS21 machines at 30 stores. They will be linked to 3,000 PCs operated by store personnel.

TANDEM COMPUTERS INC. has debuted in Japan its new strategy for ensuring a secure, reliable environment for next-generation commerce on the Internet, corporate intranets and other hybrid networks. Known as iTP for Internet Transaction Processing, this move builds on Tandem's strong presence in the on-line transactions processing market. It is supported by six iTP Solution Servers targeted at telecommunications companies, Internet service providers, firms building intranets and businesses in the banking, finance and retail fields. All six solutions include Tandem's new S-Series server, software, middleware optimized for specific industries and customization services. Marketing will start in March.

Simultaneously, TANDEM COMPUTERS INC.'s subsidiary introduced its new S-Series of servers incorporating ServerNet technology (see Japan- U.S. Business Report No. 327, December 1996, p. 8). These products include two Nonstop Himalaya systems: the S70000, built around multiple 200-megahertz MIPS R10000 64-bit RISC (reduced instruction-set computing) processors and leasing for $17,500 a month, and the S7000, which uses 150-megahertz MIPS R4400 processors and costs $10,400 a month to lease. Tandem expects to place 700 of the new systems in the first two years of marketing. Five Windows NT Server-based models also will be available starting this spring. Pricing begins at $9,700. Sales of these products are forecast at 5,000 units over two years. The NonStop Himalaya systems and the Windows NT Servers in the S-Series will be linked by common middleware now being developed by Tandem and MICROSOFT CORP.

The Japanese subsidiary of Beaverton, Oregon-headquartered SEQUENT COMPUTER SYSTEMS INC., known for its massively parallel systems, has outlined an ambitious plan for the coming business year. It will introduce a new line of Windows NT-based products as well as a totally revamped series of Unix machines. The company also expects to boost staffing to 50 or so people from the current level of less than 30 in order to strengthen marketing and customer support.

Palo Alto, California-based RESILIENCE CORP. has put on the market through distributor ITOCHU TECHNO-SCIENCE CORP. what it bills as the first low-cost fault-tolerant SPARC system. The company uses a self- described unique hardware-based approach to bring to the Resilient 110 high uptime and reliability at a fraction of the cost of traditional solutions. The key is the identification of faults at the subkernel level. In Japan the machine -- which has a standard microSPARC-II processor and 64 megabytes of memory and runs a slightly modified version of the Solaris 2.5 operating system -- costs $55,300. Itochu Techno-Science expects to sell 150 Resilient 110s in the first year.

In an attempt to expand sales of its AlphaServer family DIGITAL EQUIPMENT CORP. has tied up with YOKOGAWA DIGITAL COMPUTER CO., LTD. in the electronic data interexchange field. They will offer EDI consulting, design, development and installation of systems based on AlphaServers running either Windows NT or Unix. Systems are expected to cost $38,600. DEC hopes to sell 80 in the first year of its collaboration with YDC.

Meanwhile, the local subsidiary of DIGITAL EQUIPMENT CORP. has unveiled the first product in the AlphaServer line priced under $8,800. The 300 Series model 4/266, which uses the 266-megahertz Alpha 64-bit RISC chip and has 2.1 gigabytes of storage, is priced at that break for the Windows NT version. Models running DEC's version of Unix or OpenVMS also are available but at higher prices. .....DIGITAL EQUIPMENT CORP.'s Tokyo unit is targeting the Internet/intranet market with two additions to its AlphaServer 1000A line. Pricing starts at $20,400 for the 5/400 model and at $13,800 for the 5/333 system. .....The Windows NT 4.0 Celebris FX Series and the Celebris GL6000 line of PCs from DIGITAL EQUIPMENT CORP. also have been expanded. The new models in the GL6200 family cost between $3,800 and $4,400 for versions powered by a 200-megahertz Pentium Pro processor.

PC heavyweight COMPAQ COMPUTER CORP. is going after the workstation market, particularly that part of the business captured by SUN MICROSYSTEMS INC.'s Unix-based Ultra 2 systems. Compaq's subsidiary has introduced two models in the Professional Workstation 5000 series that run Windows NT Workstation 4.0 and have a 200- megahertz Pentium Pro processor. They list for $6,900 and $11,800, respectively, or just a fraction of what Sun charges for Ultra 2 models.

Trying to win more business in the high-end corporate market, DELL COMPUTER CORP. has released several aggressively priced Windows NT/Pentium Pro machines. The OptiPlex GX Pro is available with an 180- megahertz processor for $2,100 or a 200-megahertz chip for $2,400. A choice of 133-, 166- and 200-megahertz Pentium Pro processors is possible with the OptiPlex GXi series of machines, which range in price from $2,000 to $2,500. .....DELL COMPUTER CORP.'s strategy of using low prices to win sales actually has been extended across the board. In its third price cut since August 1996 the firm has lowered prices on all desktop and notebook machines by an average of 7.1 percent and as much as 16 percent.

In an effort to expand sales of the AS/400 line to small and midsized firms IBM JAPAN LTD. will introduce in the spring the AS/400 Advanst Entry model. The machine will list for about $8,800; that is just a third of what the least expensive AS/400 model now costs.

HEWLETT-PACKARD JAPAN LTD. has debuted a line of PC servers that are priced like PCs and are targeted at small and midsized businesses that have no information management specialists on staff. The HP NetServer E30, the first model in the series, is optimized for Windows NT Server 4.0 and NetWare. It is available with 133- and 166-megahertz Pentium processors, 16 megabytes of error-correcting random access memory standard and up to 21 gigabytes of mass storage. Pricing for the 166- megahertz processor version starts at $3,500 without a hard disk drive. Adding 2.1 gigabytes of storage raises the price to $4,600. HP Japan expects to sell 8,000 E30 systems in the first year of marketing.

The Japanese subsidiary of UNISYS CORP. has added two notebook models to its AQUANTA line of PCs. The ergonomically designed EN system, which comes with either a 133- or a 150-megahertz Pentium chip, starts at $3,400. The slim LN model, featuring a 133-megahertz Pentium processor, an 11.3-inch active-matrix liquid crystal display screen and a built-in modem, is priced at $4,100 and up.

Available through the chain of KOJIMA CORP. electronics discount stores is the high-end model of APPLE COMPUTER INC.'s Power Macintosh 7200/DOS Compatible. The machine has both a PowerPC and a Pentium processor, enabling it to run Mac, Windows and MS-DOS applications. Any of the three operating systems can be accessed with a simple keystroke. Kojima has priced the system at roughly $3,100. It hopes to sell 12,000 units over the course of a year.

INTERNATIONAL BUSINESS MACHINES CORP. has signed its second sublicensing agreement for Macintosh clones with a Japanese company (see Japan-U.S. Business Report No. 325, October 1996, p. 10). KAI GRAPHICS INC., which manages a PC users club, plans to put on the market a desktop machine powered by a PowerPC 603e processor and equipped with a 12.1-inch LCD screen. Based on the CHRP (common hardware reference platform) standard, it will run both Windows NT and the Mac operating system. Kai will consign production. It expects to price the model around $2,600.

This spring IBM JAPAN LTD. will start shipping Aptiva PCs directly to customers who purchase the multimedia machines at ADO ELECTRONIC INDUSTRIAL CO., LTD.'s T-Zone stores. Through an on-line system the retailer will place orders with IBM Japan's Yamagata prefecture factory, which will handle deliveries. The manufacturer expects to ship 1,000 PCs a month using this method, which it estimates will halve distribution costs that now total 2 to 3 percent of sales prices.

The Spectra 7000 line of high-speed fibre channel RAID (redundant arrays of independent devices) disk arrays -- claimed by manufacturer CIPRICO INC. of Plymouth, Minnesota to be the first RAID disk array to support sustained data rates of over 70 megabits per second -- is on the market through HUCOM INC. Priced between $149,100 and $157,900, the Spectra 7000 is targeted at the video production and broadcast industries as well as other applications where users need to transfer large amounts of data rapidly.

Knoxville, Tennessee-based DATA RESEARCH AND APPLICATIONS, INC. has named TECHNOGRAPHY INC. to distribute the DataByte Back Door Backup system. The 8-millimeter cartridge tape subsystem attaches directly to a disk array. It backs up data at a rate of up to 12 megabytes per second, far faster than conventional host-based tape drives. The single-drive version of the DataByte Back Door Backup lists for $58,300, while the two-drive version costs $72,400. Tokyo-headquartered Technography predicts sales of 50 units in the first year.

New from SEAGATE TECHNOLOGY, INC. is the high-capacity TapeStor 8000 Fast ATA tape drive family. The products, available in retail channels through distributor MARUBENI HYTECH CORP., can store a maximum of 8 gigabytes of compressed data or half that amount uncompressed; data transfer rates run as high as 60 megabytes per minute. Pricing ranges from $665 to $845.

Through its subsidiary QMS, INC. has put on the market two models of the QMS ColorScript 460 dye sublimation color printer. The machine has a print capability of 16.7 million continuous tone colors and 256 levels of gray. It comes with PostScript Level 2 software and provides a resolution of 600 dots per inch. The printer for A3-sized paper costs $17,100, while the one for A4-sized paper is priced at $11,800.

Fremont, California-based MICRONICS COMPUTERS, INC. has signed a distribution agreement with MARUBENI HYTECH CORP. covering motherboards for high-end servers and the Righteous 3D three- dimensional graphics accelerator for Windows 95 machines. The system boards, compatible with NetWare, OS/2, Windows NT and Unix, are sold on an OEM basis. The $289 Righteous 3D, based on the 3Dfx Interactive Voodoo Graphics chipset, delivers to PCs arcade-quality graphics at full-motion frame rates. Marubeni HyTech expects its tie-up with Micronics Computers to generate sales of $4.4 million in 1997 and $17.5 million the following year.

An exchange rate of ¥114=$1.00 was used in this report.

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CONSTRUCTION AND REAL ESTATE

RITZ-CARLTON HOTELS CO. will open its first property in Japan in May. Located in the center of Osaka, the luxury hotel will charge $237 a night for a standard single and between $298 and $342 for a double. Ritz- Carlton expects to have a Tokyo location sometime over the next five years as part of its plan to operate 60 hotels around the world versus 34 with the opening of the Osaka Ritz-Carlton.

A project announced last summer to bring megamalls to Japan is moving forward, although not on the original timetable (see Japan-U.S. Business Report No. 323, August 1996, p. 10). By the spring of 1998 Pleasanton, California-based KOLL REAL ESTATE GROUP INC. and WORLD PREMIER INVESTMENTS of Irvine, California, along with partner FUNAI CONSULTING CO., LTD., hope to have in place a 60-firm development consortium. MGS JAPAN CO., LTD., the consulting arm of the three companies, will start recruiting members this spring, targeting businesses experienced in opening and operating shopping center in Japan or elsewhere in Asia.

The petroleum and chemicals division of BROWN & ROOT and MITSUI ENGINEERING & SHIPBUILDING CO., LTD. will bid jointly in Pacific Rim countries for turnkey petroleum and chemical plant construction contracts. The pair agreed last April to tie up to capitalize on the Houston, Texas-based firm's expertise in the latest ethylene and olefin production technologies and the Japanese company's strength in building large ethylene and related types of plants.

An exchange rate of ¥114=$1.00 was used in this report.

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ELECTRIC MACHINERY

Norwalk, Connecticut-headquartered ABB INC., the biggest U.S. manufacturer of electrical transmission and distribution equipment for utilities and other commercial customers, has the distinction of supplying the first foreign-make transformer installed by KANSAI ELECTRIC POWER CO., INC. The system, already in operation at the utility's Kyoto substation, reduces 77,000-volt power to 6,600 volts. The ABB transformer reportedly cost less than comparable Japanese-made equipment.

Through its Osaka subsidiary SQUARE D CO. of Palatine, Illinois has licensed CHURITSU ELECTRIC CORP. to manufacture and market its I-LINE busway systems for distributing power up to 600 volts in commercial and industrial establishments. Busway systems can take the place of cables and conduits and, because of their compact size, they also work in settings where multiple runs of cable and conduit will not fit. No direct competitor to the I-LINE is said to be available in Japan. The Nagoya-based firm projects first-year sales of $15.8 million for what it will call the I- LINE Interior.

In a cost-cutting move HEWLETT-PACKARD JAPAN LTD. has closed the printed circuit board assembly line at its Hachioji plant in the western suburbs of Tokyo. It has consigned PCB production for such locally assembled products as electronic measuring systems to TOYO ELECTRONICS INDUSTRY CO., LTD.

Speaker maker BOSE CORP. of Framingham, Massachusetts has signed O S CO., LTD. to market two of its surround-sound systems for home theaters. The LS-6 and the LS-12 provide movie theater-quality sound through five small speakers. The Osaka-based movie theater operator will bundle the products with domestically made projection television sets. At $3,100, its home theater system costs about half of previous ones. PARADIGM SIMULATION INC., strong in three-dimensional graphics technology, has teamed up with VIDEO SYSTEM CO., LTD. to develop software for NINTENDO CO., LTD.'s new 64-bit video game machine. Their first joint product will be Sonicwings Assault, to be released in Japan in May and overseas in July. The Kyoto company expects to sell 500,000 copies in the first year of marketing. It hopes to develop three or four other titles for the Nintendo 64 with the Dallas, Texas- based firm, the creator of Pilotwings.

An exchange rate of ¥114=$1.00 was used in this report.

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FINANCE

AMERICAN HOME ASSURANCE CO., a subsidiary of industry giant AMERICAN INTERNATIONAL GROUP INC., has started to sell auto insurance by mail, the first insurer to take advantage of the new regulatory freedoms in Japan's insurance market. It initially will target sales to low-risk drivers between the ages of 30 and 60 in Tokyo and three surrounding prefectures. For now American Home's premium rates will be discounted up to 10 percent below the standard charge.

An exchange rate of ¥114=$1.00 was used in this report.

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FOOD AND AGRICULTURAL PRODUCTS

In late March agribusiness giant CARGILL INC. will sell its formula feed plant in Shibushi, Kagoshima prefecture to competitor CHUBU SHIRYO CO., LTD. for an estimated $11.4 million. The plant, opened in 1988, can mix 6,000 tons of livestock and poultry feed a month. Company executives gave no specific reason for the move, saying only that Cargill constantly is examining how best to deploy its resources around the world. The company still runs a fruit juice plant in Ibaraki prefecture and a fertilizer factory in Fukuoka prefecture. In late 1993 it sold a fairly new beef processing plant in Chiba prefecture to a big Japanese beef packer.

SMITHFIELD FOODS INC. will bring nutritional labeling for fresh pork products to Japan when distributor SUMITOMO CORP. introduces Balanced Pork/40% Fat Free in big supermarket chain stores in February. The meat will be priced 20 percent higher than regular pork. The Smithfield, Virginia pork processor hopes to sell about 2,200 tons of the new product in the first year of marketing.

Microbrewer EVANSVILLE BREWING CO. INC. has developed with NIPPON BEER CO., LTD. an organically brewed canned beer. The Tokyo-based company will start marketing the product, said to be the first organically brewed beer sold in a can rather than a bottle, to department stores and major supermarket chains in the Tokyo metropolitan area in February. Nationwide distribution is expected to follow. A 12-ounce can will be priced around $2.10. The partners hope to sell annually 50,000 cases, each containing 24 cans.

JIM BEAM BRANDS CO. has put its Avalanche liqueur on the market through NIKKA WHISKY DISTILLING CO., LTD. Although the product has a peppermint taste, it is a vivid blue color. The larger of the two sizes available (a 750-milliliter bottle) is priced at $30.70. Nikka Whisky projects sales of 3,000 cases a year; each case has 12 of the bigger bottles.

This fall Irving, Texas-headquartered SHOWBIZ PIZZA TIME INC., the franchiser of the children-oriented Chuck E Cheese's restaurants, plans to open a directly owned outlet in the Tokyo metropolitan area and another in western Japan. The restaurants will have the same attractions and menu as the American original. USIC CORP., an Osaka consulting firm that specializes in amusement parks, will manage these two Chuck E Cheese's facilities. In the following three years Showbiz Pizza hopes to open 20 to 25 other restaurants in suburban areas across Japan. SBARRO INC., the operator of a chain of Italian eateries, has tied up with DAIEI, INC., Japan's largest retailer, to open family-oriented, cafeteria-style restaurants that feature the same menu of pizza, pasta, salad and cheesecake found at U.S. locations. Long Island City, New York- based Sbarro plans to have its first restaurant in operation in the Tokyo metropolitan area during the first half of 1997. In time the partners expect to open 50 restaurants around Japan.

A gourmet hamburger chain located on the Hawaiian island of Oahu, KUA AINA SANDWICH CORP., has licensed its name to pizza delivery business FOUR SEEDS CORP. The Tokyo firm expects to open its first restaurant this spring. The four charcoal-grilled gourmet burgers on its menu will be priced around $8.75 apiece. Four Seeds hopes at some point to add the burgers to its delivery menu.

MCDONALD'S CO. (JAPAN) and NIPPON OIL CO., LTD. have announced an ambitious expansion plan. By the year 2006 the two companies expect to have McDonald's outlets at about half of Nippon Oil's 10,000 gas stations. That pairing, the gas retailer hopes, will attract more customers in Japan's increasingly competitive service station market. McDonald's will open four or five directly owned and operated outlets on a trial basis this year. The expansion could begin in 1998, at least partly on a franchise basis.

An exchange rate of ¥114=$1.00 was used in this report.

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MERCHANDISING

Discount office supply stores are coming to Japan. OFFICEMAX INC., the number two in the U.S. industry, has agreed with supermarket chain operator JUSCO CO., LTD. to open eventually as many as 200 superstores, each with a planned floor space of about 32,300 square feet. The two companies soon will form a joint venture in which Cleveland, Ohio-based OfficeMax, a K-MART CORP. affiliate, will own 19 percent. Their first store could be open by the end of 1997. It and the others will handle the same range of products as OfficeMax's U.S. stores, including computers and other equipment as well as office supplies. These products either will be imported or bought directly from Japanese manufacturers in order to hold down prices.

Meanwhile, OFFICE DEPOT INC. continues to plan its entry into the domestic discount office supply market in partnership with electronics retailer DAI-ICHI CORP. (see Japan-U.S. Business Report No. 323, August 1996, pp. 10-11). The Delray Beach, Florida-headquartered firm expects to source 65 percent of its stock of 6,000 or so products in Japan. It currently is negotiating with 60 to 70 local manufacturers for direct supplies. In a change to the original strategy Office Depot will start off with catalog sales. The first superstore, located in Hiroshima, will open in January 1998. Others will follow in western Japan. Each outlet is projected to have annual sales of $11.4 million to $13.2 million.

An exchange rate of ¥114=$1.00 was used in this report.

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METALS AND FABRICATED PRODUCTS

THERM-OMEGA-TECH, INC. has tapped SEAL TECH INC. of Tokyo as the exclusive distributor of its line of compact, self-contained valves for temperature control, freeze protection, mixing/diverting, in-line temperature control, steam tracing and energy conservation. In addition to these standard temperature-actuated valves, Seal Tech will handle the Horsham, Pennsylvania-based manufacturer's custom thermostatic valves, actuators and controls. The Therm-Omega-Tech products range in price from $220 to $675.

An exchange rate of ¥114=$1.00 was used in this report.

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NONELECTRIC MACHINERY

New on the market through the subsidiary of Minneapolis, Minnesota- based DATACARD CORP. is the DataCard 150i Card Personalization System. The compact machine allows banks, credit unions, retailers and other businesses to deliver ready-to-use, personalized ATM (automatic teller machine), debit and credit cards to customers on the spot. Standard features of the 150i include embossing, magnetic stripe encoding and color topping; smart card personalization and indent printing are options. The basic system costs $16,400.

By April OUTBOARD MARINE CORP. will introduce the new Johnson 150FFI outboard engine through YANASE & CO., LTD., one of the company's four dealers in Japan. The 150-horsepower, V-6 outboard features OMC's proprietary FICHT fuel injection system, which was developed specifically for use in two-stroke engines. The Waukegan, Illinois-based manufacturer describes the Johnson engine and its Evinrude counterpart as offering smooth, quiet operation, improved fuel economy and up to 80 percent lower emissions than carbureted models along with the performance, lighter weight and smaller size of a two-stroke engine.

CATERPILLAR INC. continues to expand the line of products sold through SHIN CATERPILLAR MITSUBISHI LTD. The latest addition is the CAT 777D large-size dump truck. Sales of five units are penciled in for the first year of marketing. The dump truck lists for $1.2 million and up.

An exchange rate of ¥114=$1.00 was used in this report.

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PHOTO EQUIPMENT AND COPIERS

EASTMAN KODAK CO.'s subsidiary is marketing two models in the Kodak MEGAPLUS Camera line, said to be the highest-resolution CCD (charge- coupled device) camera on the market. What in the United States is called the Model 4.2 provides a resolution of 4.2 million pixels per image. Its digital output is delivered in 256 levels of gray. Pricing for this version runs from $39,900 to $60,800. The Model 1.6, which ranges in price from $42,200 to $63,200, recognizes 1,024 distinct shades of gray. It consequently is designed for applications that require vivid, high-quality, black-and-white resolution.

An exchange rate of ¥114=$1.00 was used in this report.

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PRECISION AND MEDICAL EQUIPMENT

MTS SYSTEMS CORP. of Eden Prairie, Minnesota was scheduled to install in January multiple MTS Model 810 material test systems for an unnamed major Japanese engine manufacturer. The order was valued at $2 million. The 810 can perform mechanical tests on metals, composites and advanced ceramic materials. .....Meanwhile, the Tokyo subsidiary of MTS SYSTEMS CORP. has put on the market the Tytron Microforce Test System. The machine, priced between $87,700 and $105,300, performs fatigue, tension, shear and other mechanical tests at ultralow forces on such small products as electronic components, ceramic packages and gold wire. MTS expects the new system to generate annual sales of $877,200.

E-TEK DYNAMICS, INC. of San Jose, California has authorized RIKEI CORP. to market a fiber-optic coupler manufacturing system and an optical module production system. The first system is priced from $219,300; pricing has not been decided for the second one. The Tokyo- headquartered distributor hopes to sell two of each system in the first year of representation.

One of the leaders in the field of PCB process testing, CHECKSUM, INC. of Arlington, Washington, has given ORIX RENTEC CORP. exclusive domestic marketing rights to the Model TR-8 surface-mount technology tester. A 400-point test system costs $29,300. A model without SMT capabilities is priced at $16,100. The Tokyo-based lessor of high technology equipment expects the TR-8 to capture 10 percent of Japan's SMT market because it is priced 30 percent or more below locally manufactured testers.

After a yearlong test period, YUTAKA ENGINEERING CORP. has launched sales of INTEGRATED FLOW SYSTEMS, INC.'s SR Series of process gas pressure regulators. These products, designed for the semiconductor industry, are priced at about $1,600 apiece. Sales are projected at 100 units a month. Water treatment system manufacturer HYDROTREAT, INC. of Houston, Texas has on the market the HydroTreater for ultrapure water. The Tokyo subsidiary of Pasadena, California-based HAYDEN INTERNATIONAL CORP. has exclusive marketing rights to the system. The small model is priced at $14,900; a large system costs $64,200. Combined annual sales of the two models are forecast at 100 units.

An ITT CORP. company has begun selling more than 20 types of night- vision goggles and glasses for rescue efforts following disasters through A & F CO., LTD. The Yokohama-based distributor is targeting sales of the line, which ranges in price from $1,400 to $7,000, to local governments. Sales could reach $2.6 million a year, according to its forecast.

An exchange rate of ¥114=$1.00 was used in this report.

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SEMICONDUCTORS

In a split that occurred in August but only was announced at yearend, MICRON TECHNOLOGY INC. and SANYO ELECTRIC CO., LTD. ended a distribution arrangement under which Sanyo since 1989 had sold the Boise, Idaho-based semiconductor maker's DRAMs (dynamic random access memories) in Japan. Micron Technology subsequently opened a wholly owned subsidiary in Tokyo to provide sales and technical support for its products, which include static and video RAMs and other types of memories in addition to DRAMs.

ZILOG INC. is working with Tokyo-based HIROTECH CO., LTD. to develop a graphics display chip for on-screen menus on both midrange television sets and desktop computers. The firms plan to pair Hirotech's real-time pixel graphics technology with the Campbell, California company's digital TV controller. The Japanese partner's know-how introduces icons for the menus. It also eliminates the need for external memory because the screen image is stored, created and displayed a line at a time. That capability should result in a lower priced part.

Through its subsidiary in Yokohama C-CUBE MICROSYSTEMS INC. is sampling a MPEG-2 (motion picture expert group) encoder chipset for digital video disk authoring. The CLM4725 now is priced at $5,300.

Early this year ANALOG DEVICES INC.'s local unit will put on the market a new-generation chipset for digital cellular phones based on the GSM (Global Systems for Mobile Communications) technical standard. The AD20msp415 GSM baseband processing chipset is said to shorten product development and testing time, reduce system costs and deliver improved performance, including standby time of more than 100 hours. The part is expected to be priced 40 percent below the current AD20msp410 design, which uses the same architecture and employs common software. The Norwood, Massachusetts firm's subsidiary expects to sell 250,000 devices in 1997 for revenues of $8.8 million and 1,250,000 the following year for sales of $43.9 million.

A 64-bit business graphics accelerator targeted at low-cost network computers like the NetPC being promoted by MICROSOFT CORP. and INTEL CORP. will be available this spring through OAK TECHNOLOGY, INC.'s subsidiary. The OTI-64017 is designed to accelerate Internet and intranet applications via Microsoft's DirectX architecture while holding down costs. It will be priced around $11, about half of the existing price.

BROOKS AUTOMATION INC., a supplier of wafer carrier systems for use in conjunction with CVD equipment, hopes to double its Japan sales in 1997 to $17.5 million. The company is banking on the fact that its systems can handle next-generation wafers. The Lowell, Massachusetts firm's subsidiary recently relocated from Tokyo to the Kanagawa Science Park in Kawasaki, Kanagawa prefecture. The facility has a clean room for product demonstrations and customization work as well as a parts center. Brooks also plans to expand its local technical staff.

Unable to agree on business goals, VARIAN ASSOCIATES, INC. and TOKYO ELECTRON LTD. -- equal partners since 1978 in a Yamanashi prefecture- based manufacturing and marketing company -- have decided to go their separate ways as of April 1. The operations and the 130 or so employees of TEL-VARIAN LTD. will be split between the two semiconductor production equipment suppliers. Palo Alto, California-headquartered Varian will take over production of the ion implanters and sputtering equipment now made by the joint venture. Through a new direct sales network the company also will assume responsibility for domestic marketing of products now handled by TEL. Varian and TEL previously ended a U.S. manufacturing and marketing tie-up.

The range of products available from the subsidiary of world semiconductor production equipment industry leader APPLIED MATERIALS, INC. continues to expand. The firm is taking orders for the Ultima HDP-CVD Centura, a second-generation system for high-density plasma chemical vapor deposition that is designed to meet the requirements of producing high-speed devices with geometries of 0.25 micron or less. The compact Ultima system, which can be fitted with up to four HDP-CVD chambers, uses a single chamber to deposit both undoped silicate glass and "low k" fluorinated silicate glass. A two-chamber system is expected to cost about $3.2 million. Applied Materials expects to ship more than 20 systems to customers in Japan.

APPLIED MATERIALS, INC.'s subsidiary also has introduced the DCSxZ chamber for metal-CVD on the Centura platform. The system, used to deposit tungsten silicide, can handle devices with line widths of 0.35 micron. A two-chamber system is priced in the neighborhood of $1.8 million to $2.2 million. Shipments will start in April. .....Meanwhile, Santa Clara, California-based APPLIED MATERIALS, INC. is marketing in Japan the new Endura VHP PVD system for very high-productivity physical vapor deposition or sputtering. This system, which sequentially deposits composite films of aluminum, titanium, titanium nitride and tungsten, increases throughput by up to 20 percent compared with the second- generation Endura HP CVD. Prices and ship dates have yet to be determined. The 1000-IS metrology system made by LOW ENTROPY SYSTEMS of Boston, Massachusetts is being distributed by KANEMATSU SEMICONDUCTOR CORP. Designed for in situ monitoring of the wafer state, particularly during various plasma processes, the 1000-IS consists of a unique CCD camera, specialized optics, a top-of-the-line PC and proprietary software to control the camera and analyze the data. Kanematsu has priced the system between $61,400 and $87,700. It expects to sell 30 units this year.

ESI of Portland, Oregon is supplying to ADVAN-TEST CORP. on an OEM basis the L9300 laser processing system. Designed for 64- and 256- megabit DRAMs, the $1.3 million high-throughput/high-yield system restores faulty memory by sending bad cells to the redundant circuits it creates. Automatic test equipment manufacturer Advantest expects to sell 15 L9300s in the first year of marketing.

The View Engineering division of GENERAL SCANNING INC., located in Simi Valley, California, has awarded SHINKAWA LTD. exclusive rights to import and market in Japan its external examination system for ball grid array chip packages. Sold locally as the SPI-10A, the system lists for $263,200. Shinkawa, a leading maker of automated die and wire bonding equipment, hopes to sells 20 to 30 systems in the initial marketing year.

RESEARCH DEVICES, INC. also is working with SHINKAWA LTD. The Piscataway, New Jersey firm, in which Shinkawa will have a 47.5 percent stake as of May 1997, has licensed technology related to flip chip aligner bonders to the Japanese firm. As its name implies, this know-how is used to align a flipped die or wafer to a second die, wafer or substrate and then bond them together. Shinkawa will use the acquired expertise to develop within this year a system for high-volume production lines. RDI also gave Shinkawa marketing rights to the SFB-30 flip chip aligner bonder. Sales of this $280,700 machine are forecast at 20 units in 1997.

In February WENTWORTH LABORATORIES INC., a manufacturer of probe cards for testing semiconductors, will form a company with TOKYO CATHODE LABORATORY CO., LTD. to produce a vertical-type probe card. The Brookfield, Connecticut-based firm will have a 50.1 percent share in the joint venture, which will be located at its partner's Saitama prefecture plant. Executives of the new operation expect sales of $4.4 million this year and double that amount in 1999. Tokyo Cathode Lab also supplies probe cards.

CREDENCE SYSTEMS CORP. has decided as well to manufacture in Japan. The Fremont, California company -- a manufacturer of low-cost, small- footprint ATE for digital, mixed-signal and nonvolatile memories -- is partnering with its exclusive distributor, INNOTECH CORP., a trading company that specializes in semiconductor production equipment. Equally owned INNOTECH CREDENCE CORP., which will be formed this spring, targets annual sales by the year 2001 of $87.7 million.

The entry-level and high-end logic testers made by the Measurement & Systems group of SCHLUMBERGER LTD. are being marketed by YOKOGAWA ELECTRIC CORP., which already handles the ATE maker's two midrange models. Sales of the low-end model, the $526,300 TS9000CV, are projected at 40 units a year. The TS9000IX is priced at $1.3 million. YEC expects to sell 20 of this model annually.

New on the market from HEWLETT-PACKARD JAPAN LTD. are two products in its parent's recently introduced HP 94000 Series of mixed- signal testers. This cost-effective line, which is fully compatible with the existing HP 9490 Series of mixed-signal testers, is designed for both cutting-edge chips, such as those for DVDs and graphics controllers, and established mixed-signal parts, including analog-to-digital and D/A converters. The Model 160 and the Model 266 each test 256 pins. The former, priced from $526,300, has an input/output rate of 80/160 megahertz and a data rate of 320 megabytes per second. The high-end Model 266 operates at 133/266 megahertz, with a 533-megabyte-per- second digital performance. HP Japan expects to sell annually 30 to 40 testers in the HP 94000 line once shipments start in early spring.

Separately, HEWLETT-PACKARD JAPAN LTD. is selling the Model P/C in the HP 83000 Digital IC Test System line. This family was engineered to allow users to select the optimum combination of performance, production features and test cost. While it can test a range of high-performance devices, the Model P/C is customized for testing multimedia parts. The smallest configuration of the system is priced at $771,900.

An exchange rate of ¥114=$1.00 was used in this report.

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SOFTWARE AND INFORMATION SERVICES

An Internet management services company has been formed by LOTUS DEVELOPMENT CORP.'s subsidiary, along with IBM JAPAN LTD., MITSUBISHI CORP., MITSUBISHI ELECTRIC CORP. and RIMNET CORP. For an annual fee of about $875 plus per-service charges, NNS LTD. will handle user identity authentication and provide security measures and user billing for accessing World Wide Web-based information provided by NNS clients. The joint venture, in which Lotus is the biggest stockholder at 30 percent, is building its services around Lotus' Domino server software. NNS has set goals of 100 customers and $2.6 million in revenues for FY 1997.

IBM JAPAN LTD. has teamed up with K.K. KYODO NEWS and REUTERS PLC to offer a free Internet-based news ticker program to customers with Internet connections. After downloading the software, users can have Japanese-language headline news from the two agencies displayed across the bottom of their screens from 8 a.m. to 10 p.m. weekdays. Users can access the full text of an article simply by pointing and clicking at the headline as it streams by. The three firms hope to pay for the service by signing up sponsors and advertisers during the January 15-April 1 trial period. The full service starts April 1. The partners have targeted corporate users as their main customers.

ENTERPRISE PRODUCTIVITY SYSTEMS, INC. is working with INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD. to develop a Japanese-language version of the Napa, California-based firm's Internet- capable electronic forms software. Written in the Java language, the EPS Hot Form package allows users to create easy-to-use, secure electronic forms for Web commerce and customer feedback. ISID has exclusive marketing rights to this and other EPS products in Japan. It expects annual EPS-related sales will reach $43.9 million in three years.

NTT DATA COMMUNICATIONS SYSTEMS CORP. and SUN MICROSYSTEMS INC.'s subsidiary have agreed to develop new multimedia technologies based on Sun's Java language. The NTT company will contribute its networking know-how to the Java Integration Partners venture, which likely will target such areas as Web commerce for its initial effort.

A localized version of Merchant Server 1.0 will be available in February from MICROSOFT CORP.'s subsidiary to meet the demand from companies that want to engage in electronic commerce over the Internet. The server software integrates with back office operations through its compatibility with Windows NT. Pricing begins at $17,100 for a one-server license.

ICAT CORP. has brought out a Japanese-language version of its iCat Electronic Commerce Suite. Marketing is being handled by TRANS COSMOS INC. The Seattle, Washington company's suite includes Commerce Publisher, which organizes information into catalogs using built-in templates; Commerce Player, which creates CD-ROMs from the catalogs; and Commerce Exchange, which offers secure transactions, processing and tracking of electronic orders as well as registration of shoppers on a vendor's Web site. To break into this competitive market Trans Cosmos is offering the full suite for $6,800 through March; that is nearly half off the regular price. The distributor expects its aggressive pricing to generate sales of $8.8 million in the first year.

KAPALUA CONSULTING SERVICES has struck a deal with MITSUBISHI CORP. to develop Japanese-language versions of the Santa Clara, California company's software that provides secure remote access to corporate intranets via the Internet. The trader expects the Kapalua Internet Security System to appeal to the growing number of local firms that are giving notebook computers or personal digital assistants to their field representatives. Mitsubishi will provide systems design and integration to support sales of KIS, which is priced beginning at $87,700.

LOTUS DEVELOPMENT CORP. has released the latest version of its Notes groupware for the Japanese market. Notes Client Release 4.5 and Notes Domino server brings Internet/intranet connectivity and integration to the Notes family. Notes Client retails for $39, while a single-processor version of Domino starts at $1,300. .....Meanwhile, LOTUS DEVELOPMENT CORP.'s subsidiary has opened an education and technical support center in Tokyo to handle the needs of its expanding number of Notes partner corporations and end-users. The center has 110 employees for telephone and field support. The company expects to boost its overall staffing to 500 people from 350 currently to backstop its local market expansion.

HEWLETT-PACKARD JAPAN LTD. is pushing into a new printer-related market with the HP Web Jet Admin v1.0 print management software package. With an easy-to-use graphical user interface, HP Web works with LAN management software and Internet browsers to allow users to access transparently local and remote printer resources via the Internet or corporate intranet. HP Web is being offered free to the public to build the subsidiary's print server business.

Angling for a piece of Japan's booming Internet market, Seattle, Washington-based PROGRESSIVE NETWORKS INC. has opened a subsidiary to sell its RealAudio client-server software. RealAudio enables Internet and on-line users with conventional multimedia PCs hooked to voice-grade telephone lines to browse, select and play back audio or audio-based multimedia content on demand in real time. Conventional on-line or Web- based methods of downloading audio data take five times as long as the length of the audio clip.

Local users now have access to the latest release of MICROSOFT CORP.'s Windows NT Server 4.0 ($1,400-plus) and Windows NT Workstation 4.0 ($375). The updates bolster the Redmond, Washington firm's effort to make Windows NT the de facto standard for large corporate networks and intranets.

IBM JAPAN LTD. has updated its OS/2 Warp operating system for PCs. Release 4 is Internet savvy and Java friendly. It lists for $193 for customers upgrading from Warp 3.51 or $316 for first-time users.

New on the market from ORACLE CORP.'s affiliate are the latest releases of the Oracle relational data base family. Oracle7, both workgroup and individual server versions, are compatible with the Windows NT operating system. Pricing starts at $693 for a two- user/five-client workgroup server package and at $7,900 for a five- user/10-client server version. ....Separately, the Tokyo subsidiary of ORACLE CORP. is marketing improved client software. Smart Client brings such features as a graphical user interface to Oracle's entire family of applications.

Trying to capitalize on domestic companies' efforts to construct data warehouses from their legacy computer systems, IBM JAPAN LTD. has introduced Intelligent Miner. The software tool "mines" a data warehouse, extracting valuable patterns and characteristics automatically. It then displays the results in an easy-to-understand graphical format. The intelligent agent is available for AS/400 systems ($16,600) as well as for System/390 parallel enterprise servers ($20,200).

MICROSOFT CORP.'s unit has signed a deal with HITACHI SOFTWARE ENGINEERING CO., LTD. to build sales of the BackOffice application suite. HSE will install and support BackOffice at corporate clients' locations, while Microsoft will handle technical details. HSE already earns $3.5 million a month from supporting Microsoft's products. It hopes to boost this to $8.8 million a month in FY 1997.

New versions of CHEYENNE SOFTWARE INC.'s ARCserve network- compatible backup software that work with systems running Windows NT 6.0J have been released by the firm's subsidiary. One option supports autoloading tape backup mechanisms, while the other is designed to work specifically with ORACLE CORP.'s relational data base products, backing them up transparently. Prices begin at $1,300 for a single-user version and $3,000 for enterprise-level coverage.

SCOPUS TECHNOLOGY, INC. and TOYO ENGINEERING CORP. are turning their earlier marketing agreement (see Japan-U.S. Business Report No. 320, May 1996, p. 16) into actual products and services. The two have begun to offer a localized version of the Emeryville, California company's customer-care applications. These not only handle the Japanese language but are tailored to business practices in Japan. The pair's second offering is a localized version of Scopus' Telecom Central software suite, a customer service package designed specifically for the booming telecommunications services industry. Telecom Central costs between $4,400 and $6,100 according to the number of end-users.

Renaissance CS, an integrated enterprise resource planning system for process manufacturers developed by ROSS SYSTEMS INC. is being used by MIZUSAWA INDUSTRIAL CHEMICALS, LTD. The maker of specialty chemicals hopes to branch into the computer services field using the Atlanta, Georgia firm's client-server product, which manages the manufacturing, distribution and financial aspects of process control. Through distributor NIPPON STEEL CORP. Tewkesbury, Massachusetts- based AVID TECHNOLOGY, INC. is offering updates of its on-line digital nonlinear video editing system for machines running Windows NT. MCXpress Version 1.5 lets users create and play back in real time dissolves, wipes, titles and color effects, all with an easier to use interface. The price ($5,200 for the program alone or $19,300 to $28,900 for a hardware/software package) and ease of use should appeal to a wide range of companies. Nippon Steel has targeted sales of 5,000 to 10,000 units this year.

MICROSOFT CORP. and SHOGAKUKAN INC. of Tokyo have rolled out their second jointly developed product for the education market. Microsoft/Shogakukan Bookshelf is a powerful search engine that can scan up to six dictionaries or reference sources on CD-ROMs. The key word- based search engine costs just $88 to $132, leading the partners to project first-year sales of 100,000 units.

To gain share in Japan's booming markets for computer games and educational software 7TH LEVEL, INC. has opened a local software development subsidiary and is building an entertainment/education Web site for Japanese children, Kids World Online. The Richardson, Texas-based multimedia edutainment firm plans to roll out up to 15 CD-ROM titles in the next year, three or four of which will be developed in Japan. 7th Level hopes to ring up annual sales of $17.5 million there within three years.

JUSTSYSTEM CORP.'s efforts to localize CD-ROM games developed by KNOWLEDGE ADVENTURE INC. are beginning to yield results. After obtaining an exclusive license to distribute the La Crescenta, California firm's products, JustSystem has put on sale a game that simulates the complex task of directing a movie production. Steven Spielberg's Director's Chair, a three-disk set, has a suggested retail price of $60. Sales are forecast at 100,000 copies. JustSystem now is localizing an adventure game created by Knowledge Adventure for a February release.

With the help of partner MITSUBISHI CORP., Edison, New Jersey-based VERBEX VOICE SYSTEMS INC. has created a Japanese-language version of its Listen voice-recognition software. The $596 utility lets users issue voice commands to operate Windows-based applications.

MICROSOFT CORP. is trying to use the growing installed base of Windows NT systems in domestic firms as a springboard into the market for corporate accounting software and systems. Its subsidiary wants to develop turnkey accounting solutions tailored to the specific needs of several industries and markets. It is looking for a local partner with accounting experience.

LEADING MARKET TECHNOLOGIES, INC. has brought to Japan through distributor SUMISHO INFORMATION SYSTEMS CORP. two of its cutting-edge software packages for the financial sector. The Cambridge, Massachusetts firm's $5,300 Expo graphical spreadsheet package pairs powerful mathematical, statistical and timer series analysis routines with a highly visual, customizable, user-friendly front end. TickBase, priced at $26,300, is a high-speed data capture and retrieval system designed to track and analyze tick-by-tick changes in the prices of financial instruments, such as stocks and bonds. Several major securities firms are using Tickbase to test and fine-tune their analytic trading models. Sales this year of the two programs are forecast at 200 copies.

The local operation of DOMAIN SOLUTIONS CORP. has tapped DIGITAL EQUIPMENT CORP.'s subsidiary to be the Japan systems integrator for the Cambridge, Massachusetts firm's Clintrial 4 clinical development data management software package. Domain executives said that they selected DEC for its experience with Unix systems and its ties to the domestic pharmaceutical, biotechnology and medical device industries. A Japanese- language release of Clintrial 4, which costs $144,700 for a four-user version, was scheduled for marketing in January. DEC hopes to sell 10 of the systems the first year.

APPLIED MEDICAL INFORMATICS, INC. has awarded KAINOS LABORATORIES, INC. exclusive rights to market its medical information software packages. The Salt Lake City, Utah firm's Iliad provides physicians timely and accurate diagnostic and treatment support as well as easy access to medical literature. Medical HouseCall helps families understand medical problems and treatments. It also allows them to create and keep personal medical histories. Kainos hopes to sell 30,000 copies of the $130 Medical HouseCall package this year and an undisclosed number of Iliad programs.

Austin, Texas-headquartered SKIPSTONE, INC. and marketing partner KOBE STEEL, LTD. are aiming four software packages at electronics makers developing "smart" multimedia/information home appliances that will connect to PCs via the high-speed serial bus standard, IEEE 1394. The four packages -- the TK-10 developer toolkit, the SerialSoft programming interface binary and source codes, and a low-level controller/device- driver source code -- will help makers design and verify IEEE 1394 interface circuitry and software. The steel manufacturer expects its tie- up with Skipstone will generate $526,300 worth of annual business.

Also preparing for the next generation of high-speed PC peripherals, GENOA TECHNOLOGY, INC. of Moorpark, California is offering local electronics firms its Universal Serial Bus Protocol Analyzer. It provides event analysis, packet analysis, transaction analysis and frame analysis of USB traffic. NISSHO ELECTRONICS CORP. is handling sales of the $7,900 package. It has set a first-year sales goal of 100 units.

EXA CORP. and distributor KGT, INC. of Tokyo, a wholly owned unit of KUBOTA CORP., are billing the Lexington, Massachusetts firm's latest product, PowerFLOW, as a breakthrough in computational fluid dynamics and fluid CAD tools. PowerFLOW can simulate how fluids or gases move around complex objects using engineering workstations rather than supercomputers. A PowerFLOW license costs from $28,100 to $184,200 a year. KGT hopes to raise sales from 10 systems in 1996 to 100 this year.

EAGLE POINT SOFTWARE INC. has signed KOZO KEIKAKU ENGINEERING, INC. of Tokyo to distribute two of its CAD packages. Based on AUTODESK INC.'s AutoCAD system, the Dubuque, Iowa firm's Civil Engineering Series and LANDCADD series support surveying, site development, road design, hydraulics/hydrology, landscape design, irrigation and golf course design. KKE will handle localization and standardization issues while working hand-in-hand with Eagle Point's technical and marketing staffs.

The ranks of Japanese automotive manufacturers using STRUCTURAL DYNAMICS RESEARCH CORP.'s mechanical design automation software has expanded with the decision by MAZDA MOTOR CORP. to purchase the I-DEAS Master Series as well as Metaphase Series 2 product data management software. These products will form the core of Mazda's concurrent engineering system for vehicle and tooling design. The company expects the software suites to help reduce development costs and time to market by making the engineering, modeling and test manufacture processes all digital. Mazda is obligated to purchase at least $19 million worth of software and services from SDRC over three years, but the Milford, Ohio supplier believes the amount could be double this figure. SDRC distributor INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD. will handle the actual sale as well as provide support.

MENTOR GRAPHICS CORP.'s subsidiary is updating its line of integrated circuit design verification tools. Quick HDL-XLC, priced at $28,500, offers faster analysis and verification of timing cycles. It already is available. Coming in April are SimExpress Hardware Emulator, a $28,500 revamped complex/hybrid circuit emulator, and the $21,900 Quick HDL Express, which links the previous two products with existing Quick HDL systems. The tools allow simulation and verification of hardware and software together.

GENERAL MAGIC INC. has written a new version of its Magic Cap operating system for portable information terminals, such as SONY CORP.'s Magic Link. The updated OS offers integrated support for Internet browsers, electronic mail protocols and Web image formats as well as a faster operating speed. The Sunnyvale, California firm expects electronics makers to announce several new Magic Cap-based products in 1997, including personal Internet communications devices and "smart" telephones.

To further its research on advanced mobile communications technologies NTT MOBILE COMMUNICATIONS NETWORK, INC. has licensed two data communications programs from GEOWORKS of Alameda, California. The programs, one for mobile personal information terminals and the other for networks, provide mobile devices with an interface to such Internet activities as browsing Web pages. Geoworks is pushing its GEOS operating system as a global standard for next-generation digital cellular "smart" phones and the emerging consumer computing devices market. Several electronics makers, including NEC CORP., have chosen GEOS for their mobile communications devices (see Japan-U.S. Business Report No. 321, June 1996, p. 15).

IBM JAPAN LTD., LOTUS DEVELOPMENT CORP.'s unit and KYOCERA CORP. are about to market a jointly developed program that links personal handyphones with LANs for data transmission. Using the package, field representatives can access their PCs at the office or any data resource on the office LAN via the PHS microcellular telephone system. IBM Japan contributed the data transmission technology, Lotus the LAN interface and control components and Kyocera the PHS know-how.

An exchange rate of ¥114=$1.00 was used in this report.

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TELECOMMUNICATIONS EQUIPMENT

In January the local unit of LUCENT TECHNOLOGIES INC. expected to launch a Japanese-language version of a new global call center. The product not only provides greater handling capacity than Lucent's DEFINITY call center platform but also includes supervisor management tools, computer-telephony integration applications, speech recognition, training products and voice terminals written from scratch in Japanese. A system for 50 operators is priced from $307,000. In 1997 alone Lucent plans to sell 200 systems in Japan.

The world leader in stackable hubs, 3COM CORP., is marketing the SuperStack II Port Switch Hub 10 for shared Ethernet networks. The Santa Clara, California company claims that the product sets a new price/performance standard for a managed stackable hub, with the 12- port model priced at $1,000 and the 24-port version at $1,800. Up to 10 SuperStack II Port Switch Hub 10s can be stacked together to deliver up to 260 ports per stack. Users have the option of adopting 3Com's Power Grouping technology in the future to meet expanding bandwidth and management requirements. The firm's subsidiary believes that the product's flexibility and pricing will enable it to sell 30,000 units a year.

CISCO SYSTEMS, INC.'s subsidiary has put on the market a manageable, stackable Fast Ethernet line of hubs, the two-model FastHub 100+. The standard type with 16 ports goes for $3,200, while an optical-fiber system costs about $3,900.

Demand in Japan for SOHO (small office/home office) products apparently is expanding more slowly than CISCO SYSTEMS, INC. anticipated. The company's subsidiary consequently has decided to switch its small network marketing emphasis from the Cisco Pro SOHO line to products that meet the requirements of domestic corporations' branch offices, a segment of the market where demand is growing quickly. As part of this shift, the company plans to give OTSUKA SHOKAI CO., LTD., the main Cisco Pro sales channel, the right to sell other Cisco products.

Rival BAY NETWORKS, INC. continues to go after the SOHO market in Japan, adding through its subsidiary the EN 516 model to the SOHO- targeted NETGEAR line and cutting prices on the existing products in the series. The new model, a 16-port 10Base-T hub, lists for $349.

Alameda, California-headquartered ASCEND COMMUNICATIONS, INC. has released a new product in its MAX line of remote access servers that addresses the requirements of midsize Internet service providers. Pricing is open on the MAX 2000, which allows 24 simultaneous connections. .....Meanwhile, ASCEND COMMUNICATIONS, INC. has given NETONE SYSTEM CO., LTD. exclusive sales rights to the GRF 400 IP (Internet protocol) switch introduced last fall. The smallest configuration of the system, which is designed to tackle the congestion problems on carrier and Internet backbones, is $64,900.

PROTEON INC. has teamed up with NTT ADVANCED TECHNOLOGY CORP. to bring to the domestic market remote access connectivity products for ISDNs (integrated services digital networks). The devices developed by the Japanese partner will draw on technology incorporated in the Westborough, Massachusetts firm's GlobeTrotter 72-S/T remote access router as well as its own data service units.

HYBRID NETWORKS, INC., a developer of modems that provide high-speed Internet access to PCs over broadband networks operated by CATV companies or wireless cable systems, will work with SHARP CORP. and ITOCHU CORP. on the design, production and distribution of cable modems. A major thrust of the collaboration is to lower product prices. Sharp will manufacture Hybrid Series 2000 internal and external cable modems for the Cupertino, California firm. It also will make under license its own version of the line. Itochu will handle distribution.

Early this year MOTOROLA INC.'s subsidiary will put on the market a localized version of the ModemSURFR, a 33.6-kilobit-per-second data/fax modem targeted at the fast-expanding consumer market. The firm hopes to win 10 percent of the personal use modem market by marketing the ModemSURFR directly as well as through existing and new distribution channels.

MICROSOFT CORP.'s subsidiary and NIPPON TELEGRAPH AND TELEPHONE CORP. are trying to spread LANs and WANs (wide area networks) to midsized and small companies. The goal of their WINE Project, in which some 250 systems integrators are participating, is to convince companies building client-server systems to use Windows NT 4.0 as the network operating system and NTT's ISDN service to connect their various locations. Among the project participants are FUJITSU, LTD., NEC CORP. and SOFTBANK CORP.

WebTV, which provides Internet access via set-top boxes attached to television sets and regular telephone lines, will be coming to Japan this summer (see Japan-U.S. Business Report No. 323, August 1996, p. 5). The technology's developer, WEBTV NETWORKS INC., soon will form a company with FUJITSU, LTD. to offer the service. The Palo Alto, California-based company, which will have a 65 percent stake in the joint venture, will license its software to electronics manufacturers interested in making the set-top boxes. The price of the service has not been established, but WebTV executives say that it will be similar to the $19.95 per month charged in the United States.

AT&T CORP.'s WorldNet Internet access service now is available in Japan as well as in the United States. AT&T JENS CORP. is charging a sign- up fee of about $26, plus roughly $17.50 a month for unlimited Internet access. That flat rate undercuts not only what the numerous small Japanese Internet service providers that have to pay connection fees to common carriers charge but also the cost of NIPPON TELEGRAPH AND TELEPHONE CORP.'s Internet access service. AT&T Jens is a joint venture between the U.S. firm (67 percent) and 25 local partners, including many corporate heavyweights.

San Diego, California-based QUALCOMM INC. continues to win backers in Japan for its CDMA (code-division multiple access) technology for cellular and wireless communications applications. The latest licensees are HITACHI, LTD. and ALPS ELECTRIC CO., LTD., both of which have production and marketing rights to CDMA-based products. An exchange rate of ¥114=$1.00 was used in this report.

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TEXTILES AND APPAREL

E.I. DUPONT DE NEMOURS & CO., INC. has a contract to supply Dacron Fleece, a lightweight, heat-retaining, water-resistant fabric, to SEIREN CO., LTD. The textile and apparel company plans to make outdoor and casual clothing for sale through traders KANEMATSU CORP. and MITSUI & CO., LTD. Volume could run as high as 359,000 square yards in the first year of the deal.

Hoping to cash in on the craze in Japan for Barbie dolls, creator MATTEL INC. will design a Japan-exclusive line of clothes, lingerie, shoes, hats, gloves and other accessories for young women aged 15 to 25 that is styled after the fashions worn by the world's best-selling doll. The merchandise, to be available starting this fall, will be handled under license by ITOCHU FASHION SYSTEM CO., LTD. It will sublicense production of the various items to domestic manufacturers. Mattel believes that in time the "Barbie-lifestyle" products could develop into an $87.7 million annual business.

New York City-based EAST WIND CODE LTD. will introduce designer Vivienne Tam's spring/summer 1997 collection for young women through ORIZZONTI CO., LTD. The Chinese-inspired line will be sold initially in more than 30 stores across Japan, including 20 specialty shops, department stores and the Kobe-based distributor's own boutiques. Dresses will be priced from $250 to $430. Jackets will cost anywhere from $430 to $535, while skirts and pants will be in the $185 to $290 price range.

The BCBG brand of women's career and casual clothing and accessories is available through SUZUYA CO., LTD. under license from Los Angeles, California-headquartered BCBG INC. The Tokyo-based distributor already has a BCBG boutique in a Chiba prefecture mall and another in the Hibiya section of the capital. BCBG coats cost between $370 and $605. The dress line is priced from $160 to $330. Handbags sell for $210.

This spring DONNA KARAN CO.'s Tokyo subsidiary will regroup the designer's DKNY line of women's clothing into five labels on price and type in an effort to boost sales. High-end DKNY products will remain the main brand, accounting for an estimated half of the company's Japan sales through boutiques in 10 department stores. New to the retail scene will be DKNY Classic, DKNY Active, DKNY Jeans and DDKNY. The company also will debut the Donna Karan Signature line, which will be priced significantly below DKNY products, as well a DKNY Kids line made up of 190 items for children aged 4 to 16.

An exchange rate of ¥114=$1.00 was used in this report.

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TRANSPORTATION EQUIPMENT

Although the pace is slow, CHRYSLER JAPAN SALES LTD. continues to sign up dealers under its "main dealer" strategy -- a plan to have at least one showroom per prefecture solely devoted to CHRYSLER CORP. products, with the main dealer's other outlets turned into multibrand stores. In December Chrysler Japan signed an agreement with K.U. CO., LTD., which sells used cars and imported vehicles at 14 locations in Tokyo and neighboring Kanagawa prefecture, to handle Chrysler products in Sagamihara, Kanagawa prefecture and in the Machida area of Tokyo. The Sagamihara store is expected to be open by June. K.U. is projecting sales of 180 Chrysler vehicles a year. Also in December Chrysler Japan inked a main dealer agreement with SUNFLOWER CO., LTD., which sells MAZDA MOTOR CORP. and FORD MOTOR CO. brands in Fukuoka prefecture on Kyushu. Sunflower plans to open in April an exclusive Chrysler showroom in Onojo, followed later by an exclusive showroom in Kita-Kyushu. The new dealer aims to sell more than 200 Chrysler products in 1997. To boost brand identification in Japan FORD MOTOR CO. will change the name of AUTORAMA INC., the primary retail channel for Ford products, to FORD SALES JAPAN LTD. The 321-store chain, which sells imported Ford vehicles as well as Ford-badged cars developed and built by affiliate MAZDA MOTOR CORP., will remain equally owned (45.1 percent each) by Ford and Mazda. It will be solely responsible for product and sales planning in addition to marketing, jobs now split between Autorama and FORD MOTOR CO. (JAPAN) LTD. In the future that company will concentrate on importing, distribution and predelivery inspection.

An exchange rate of ¥114=$1.00 was used in this report.

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MISCELLANEOUS

Household products giant PROCTER & GAMBLE CO. will close its plant in Fuji, Shizuoka prefecture in June. The pending move is part of a worldwide P&G reorganization designed to trim production costs. Products now made in Japan will be manufactured elsewhere in Asia.

Cleveland, Ohio-headquartered AMERICAN GREETINGS CORP. has set its sights on the Japanese market. It has awarded to HIGA INDUSTRIES, LTD. exclusive domestic marketing rights to its greeting cards, wrapping paper and related products. The company also plans to develop a line of cards specifically for Japan. Also on tap is the in-store equipment that allows people to design their own cards. Higa already is selling wrapping paper made by American Greetings at 51 Toys "R" Us stores.

As part of its drive to raise sales of writing instruments in Japan, GILLETTE CO.'s subsidiary has added the lower-priced Frontier line to the Parker family of fountain pens, ballpoint pens and mechanical pencils. The new products, which include the first Parker-brand fountain pen to be priced below $44, are aimed at high school and college students. Gillette hopes to sell the Frontier line in office supply stores and volume retail outlets as well as through department stores, its traditional marketing channel.

SHISEIDO CO., LTD. was scheduled to launch sales in late January of the made-in-America Benefiance line of skin-care products. The products, sold in the United States for the last year, will be available initially at only seven to nine department stores that handle foreign-made cosmetics. During FY 1997, however, Japan's top cosmetics company plans to raise to 60 the number of outlets selling the Benefiance line.

Japan remains a major draw for U.S. manufacturers of golf clubs. CALLAWAY GOLF CO. of Carlsbad, California has put on the market through distributor SUMITOMO RUBBER INDUSTRIES, LTD. four clubs in the Big Bertha Tour Wedge line. These products, priced at about $160 each, are designed for midlevel players. Sumitomo Rubber is projecting the new line's annual sales at 40,000 clubs. .....To celebrate 100 years of business MACGREGOR GOLF CO. of Norcross, Georgia will introduce this spring new clubs under the Excentury name. Its subsidiary will be marketing a titanium wood that is available with four different shafts for $772 to $947. A set of 10 forged irons also will be released at prices of $1,900 for average golfers and about $2,500 for power hitters. To be marketed as well will be a $2,600 set of 10 titanium irons. .....Meanwhile, the local operation of Hudson, Ohio-based WILSON GOLF CO. will debut in February two all-new Staff Titanium golf balls. A new string-wrapped ball will come on the market in April. All three will be priced at $3.50 apiece. Wilson expects to sell 100,000 dozen of the new products in 1997.

The Salem Pianissimo Slim Light brand of cigarettes is being marketed by R.J. REYNOLDS TOBACCO CO.'s subsidiary. Priced at $2.19 a pack, the product has 6 milligrams of tar and emits less smoke than regular cigarettes.

A plastic-encapsulated chip for identifying pets that is made by DESTRON FEARING CORP. of Boulder, Colorado will be marketed by DAINIPPON PHARMACEUTICAL CO., LTD. The device, which stores a number assigned to the animal's owner, is not harmful to the pet. Nor is implanting the chip, a procedure likely to cost about $30, very painful. The chip is read by a special scanner that is expected to priced between $175 and $263. The veterinary association in Aichi prefecture already has said that its members will use the chip. Starting in April, desks, tables and other furniture for holding computer equipment will be available from the office products division of RUBBERMAID INC. The Wooster, Ohio-headquartered company has signed OKAMURA CORP. of Yokohama to handle the line. It envisions first-year sales of $8.8 million.

Four automotive oil products made by COASTAL UNILUBE INC. of Memphis, Tennessee are on the market through PACIFIC RIM ASSOCIATES K.K. The Tokyo-based company already has signed up 10 firms to wholesale the products to vehicle service centers. Within three years it aims to have 70 wholesalers supplying 700 garages. On average the oil is priced at wholesale 30 percent lower than domestically produced counterparts. Coastal Unilube foresees doing $4.4 million worth of business in Japan this year.

The Shibuya section of Tokyo will be the site of a June 1998 test of electronic money by a consortium led by VISA INTERNATIONAL INC. Five major credit card issuers and five big commercial banks will participate in the experiment, said to be the world's largest in terms of the number of companies involved and the 100,000 or so cards expected to be issued. The electronic money card basically works like a prepaid card.

An exchange rate of ¥114=$1.00 was used in this report.

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