No. 364, January 2000

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Japanese Companies in the United States

American Companies In Japan

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Japanese Companies in the U.S.


Deciding that operational autonomy might give its worldwide drug delivery technologies business a competitive leg-up, YAMANOUCHI PHARMACEUTICAL CO., LTD. spun out these activities from its SHAKLEE CORP. subsidiary. Palo Alto, California- headquartered YAMANOUCHI PHARMA TECHNOLOGIES, INC., which assumes the work that was done by the Yamanouchi Shaklee Pharma and YS Pharma divisions, will continue to have primary responsibility for the international introduction and commercialization of unique drug delivery systems. In its former incarnation, Yamanouchi Pharma Technologies already had scored with WOWTAB, a quick-dissolving, without- water tablet technology that was licensed in mid-1998 to JOHNSON & JOHNSON- MERCK CONSUMER PRODUCTS CO. for an over-the-counter product, as well as with the OCAS oral controlled-release system and the colon-targeted release system CODES. Shaklee's Norman, Oklahoma solid-dosage manufacturing facility has the capability to manufacture products incorporating all three drug delivery technologies.

In a deal that will help TAKEDA CHEMICAL INDUSTRIES, LTD. gain more U.S. marketing expertise, INTERNEURON PHARMACEUTICALS, INC. licensed exclusive North American commercialization rights to CerAxon (citicoline), a treatment for ischemic stroke, to Japan's top drug company. Takeda Chemical will pay the Lexington, Massachusetts drug development company $73 million in near-term licensing and milestone fees, plus royalties on net sales. Interneuron Pharmaceuticals indicated that a primary reason it went with Takeda Chemical is because that firm is the discoverer of citicoline. TAKEDA PHARMACEUTICALS AMERICA, INC. of New York City will be in charge of commercializing CerAxon, which is nearing the end of Phase III clinical trials. The Food and Drug Administration assigned citicoline fast-track approval status.

ABBOTT LABORATORIES, a major player in the anti-infective market, has gained U.S. marketing rights to Omnicef (cefdinir), a broad-spectrum cephalosporin antibiotic that is the top seller in its class in Japan. FUJISAWA PHARMACEUTICAL CO., LTD., the developer of cefdinir, originally licensed the drug to WARNER-LAMBERT CO. However, Abbott Labs reportedly lobbied hard to add cefdinir to its anti-infective portfolio, which includes the flagship product Biaxin (clarithromycin) and various erythromycin products. Omnicef has been available in the United States since August 1998. Sales in 1999 are estimated at $40 million.

At some point down the road, ABBOTT LABORATORIES could have two other antibiotics in its lineup. In a tie-up with WAKUNAGA PHARMACEUTICAL CO., LTD., the Abbott Park, Illinois company gained exclusive worldwide rights to develop, manufacture and market a pair of broad-spectrum quinolone antibiotics discovered by the Osaka over-the-counter drug firm. The quinolone class of antibiotics is the fastest-growing segment in the international anti-infective market. The two candidates currently are in the preclinical stage of testing for various respiratory and urinary tract infections. Preliminary data on one indicate promising efficacy against several strains of bacteria currently resistant to antibiotics.

FUJISAWA HEALTHCARE, INC. will copromote to American dermatologists two of SMITHKLINE BEECHAM PLC's drugs. They are the antiviral Famvir (famciclovir tablets), which is approved for recurrent genital herpes and herpes zoster, and the topical antibiotic Bactroban (mupirocin cream and ointment). The former is indicated for secondarily infected traumatic skin lesions, while the latter is aimed at impetigo. Fujisawa Healthcare currently markets two dermatology products, Aristocort and Cyclocort. However, the Deerfield, Illinois subsidiary of FUJISAWA PHARMACEUTICAL CO., LTD. is especially optimistic about the sales prospects for its tacrolimus ointment, which is described as the first new drug in more than 40 years to be developed specifically for the treatment of the chronic skin conditions caused by eczema. A new drug application already was filed with the FDA last fall (see Japan-U.S. Business Report No. 361, October 1999, p. 3).

The expansion of its pharmaceutical business prompted JAPAN TOBACCO INC. to rethink its commitment to XenoMouse, a method for generating human-type monoclonal antibodies from mice that are applicable to the treatment of a wide range of drugs. The big cigarette manufacturer had pursued this technology since September 1991 in collaboration with CELL GENESYS, INC. and since 1996 with that Fremont, California company's ABGENIX, INC. subsidiary. As a result of the review, JT agreed to sell its half-interest in development venture XENOTECH, INC. to its partner for $47 million. Abgenix also will pay JT $10 million to relinquish certain XenoMouse option and licensing rights. However, this amount will be offset by the $10 million that the Japanese company pays Abgenix for continued access to some XenoMouse-related technologies. JT estimates that it and its subsidiaries invested more than $40 million in the development of the XenoMouse know- how. Executives said that the company had decided that it would be better off in the long run creating antibody-based products that JT could sell on its own rather than depending on the royalties generated from the licensing of the XenoMouse expertise.

To accelerate the discovery and the development of new treatments for diabetes, FUJISAWA PHARMACEUTICAL CO., LTD. formed a research alliance with GENE LOGIC INC. Their goal is come up with a custom gene expression data base. In simplified terms, the Gaithersburg, Maryland firm will use its proprietary gene expression analysis tools together with AFFYMETRIX, INC.'s GeneChip probe arrays to identify genes that are differentially regulated — in short, more or less active — in people with diabetes than in healthy individuals. Although most details of the agreement were not released, the partners did indicate that Gene Logic would have the right to incorporate information generated from the study in its GeneExpress data base. Gene Logic also is using its expertise to identify drug targets for JAPAN TOBACCO INC. (see Japan-U.S. Business Report No. 353, February 1999, p. 3).

In a similar relationship, TAISHO PHARMACEUTICAL CO., LTD. is collaborating with genomics company QUARK BIOTECH, INC. to pinpoint and analyze genes and pathways involved in kidney diseases. Their hope is to develop drug candidates that will reverse the rising need for dialysis or transplantation. Under the agreement, Taisho Pharmaceutical will have exclusive worldwide rights to commercialize products resulting from the joint investigation in exchange for providing research and development funding and making milestone and royalty payments. QBI will be in a position to comarket commercialized products in North America and Europe. In addition to the arrangement with Taisho Pharmaceutical, the Pleasanton, California firm is using its drug discovery techniques to help FUJISAWA PHARMACEUTICAL CO., LTD. (see Japan-U.S. Business Report No. 356, May 1999, p. 2) and SANKYO CO., LTD. (see Japan-U.S. Business Report No. 361, October 1999, p. 2).

The FDA approved a disinfectant developed by YOSHITOMI FINE CHEMICALS, LTD. for use in paper and paperboard that comes in contact with food, clearing the way for U.S. sales. HERCULES INC. will market the antimicrobial agent, which kills bacteria and mold when added in small amounts to the paper pulp slurry used to make packaging. The subsidiary of YOSHITOMI PHARMACEUTICAL INDUSTRIES, LTD. obviously expects a big market to develop quickly for its product since it is forecasting annual sales of $58.3 million after just two years.

For $400,000, FORTUNE CHEMIDACS CO., LTD. acquired W.R. GRACE & CO.'s metalworking coolants unit. This Chicago business makes Daralube, a synthetic chemical fluid that was developed specifically for marketing in Japan. Some 200 manufacturers there are said to use Daralube in their metal-processing operations, sold on its high-performance lubricating and cooling abilities as well as on its environmentally friendly properties. Now that it owns the business, Tokyo-based Fortune Chemidacs, itself a producer of metalworking fluids, plans to launch U.S. sales of Daralube.

An exchange rate of ¥103=$1.00 was used in this report.

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Moving quickly to minimize the fallout on its North American computer sales from the decision to liquidate PACKARD BELL NEC, INC. (see Japan-U.S. Business Report No. 363, December 1999, p. 3), the soon-to-be-operational NEC COMPUTERS, INC. signed a supply arrangement with contract electronics manufacturer SCI SYSTEMS, INC. The Huntsville, Alabama company, one of the biggest in its field, will build or customize to order a range of existing and new NEC CORP. laptop and desktop computers, including Versa notebooks and PowerMate desktop systems. SCI Systems also reportedly will make certain Express5800 servers, although others will be imported from the European operations of NEC COMPUTERS INTERNATIONAL B.V., the parent of Mountain View, California NEC Computers. NEC itself apparently will be the source of the MobilePro handheld PC. As part of the outsourcing deal, SCI Systems will buy some of the equipment that the current NEC Computer Systems Division of Packard Bell NEC has at its Sacramento, California factory and install it at the existing Huntsville-area facility that will be in charge of production for NEC Computers. Like NEC CSD, the new company will target sales to corporate, government and educational markets in the United States and Canada.

In an otherwise off month for product launches, the Computer Systems Group of TOSHIBA AMERICA INFORMATION SYSTEMS, INC. released additions to two of its notebook lines. For performance-seeking mobile professionals, the Irvine, California manufacturer introduced the thin (1 inch), lightweight (4.4 pounds) and stylish Portégé 7140CT. Powered by the fastest mobile Pentium III available, a 500-MHz processor, the system includes 64 megabytes of PC100 memory, expandable to 192 MB, and a 6- gigabyte hard drive. The active-matrix TFT (thin-film-transistor) display measures 13.3 inches and provides a XGA (extended graphics array) resolution of 1024 x 768 pixels. The Portégé 7140CT also comes with a new, powerful three-dimensional graphics controller and two Type II slots or one Type III PC Card slot and a universal serial bus port for connections to peripherals and networks. The notebook's estimated street price is $3,300 for Windows 98 SE and $3,400 for Windows NT 4.0. An extra $650 will buy the DVD (digital video disc) Network Dock II port replicator, which, according to TAIS, turns the Portege 7140CT into a true desktop replacement.

TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSG, the American portable computer sales leader, also expanded its Tecra line of notebooks, which is designed to give corporate buyers power and mobility along with the investment protection of platform stability. The Tecra 8100 series features a 500-MHz or a 450-MHz mobile Pentium III processor with 256 kilobytes of integrated Level 2 cache and a 100-MHz front-side bus for faster processing. As much as 256 MB of high-speed PC100 memory also accelerates applications. Among other options, buyers have a choice of a 14.1-inch or a 13.3-inch active-matrix TFT display, both with XGA resolutions. In fact, configuration flexibility is a defining characteristic of the Tecra 8100 family. By TAIS's count, 5,184 build-to-order hardware combinations are possible.

An exchange rate of ¥103=$1.00 was used in this report.

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Another major Japanese real estate developer has decided that the time has come to sell its offshore property holdings and use the proceeds to pay down debt. SUMITOMO REALTY & DEVELOPMENT CO., LTD., though, is going further than some of its equally struggling counterparts in that it plans to liquidate its complete portfolio of foreign assets. In the United States, those include the Tishman Building at 666 Fifth Avenue in Manhattan. Sumitomo Realty reportedly paid close to $500 million for this 41-story office tower in 1987. Other U.S. properties that will be put up for sale include a Park Hyatt Hotel in California. The company's subsidiaries in New York City and Irvine, California also will be liquidated. No time frame has been set for Sumitomo Realty's withdrawal from the overseas property market.

An exchange rate of ¥103=$1.00 was used in this report.

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Attempting to leverage their respective expertise in DVDs and recordable compact discs, PANASONIC DISC SERVICES CORP., a wholly owned MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. company, and EASTMAN KODAK CO. formed a business to manufacture optical media for sound, video and data recording for both parents. Torrance, California Panasonic Disc, which, in 1996, opened the first disc replication facility in the United States dedicated exclusively to DVD discs, owns 51 percent of MATSUSHITA MEDIA MANUFACTURING LLC OF AMERICA, also based in Torrance. Like MEI, Kodak contributed financial and such other assets as intellectual property and technical know- how to the venture, but it also made its CD-R factories in Guadalajara, Mexico and in Ireland part of the new company. These facilities turn out 180 million CD-Rs a year. Developing new optical media products based on DVD technology will be a primary thrust of Matsushita Media Manufacturing, although the partners also will pursue advances in CD-R technology. The joint venture will start making DVDs at an initial rate of 1.8 million units a year in the spring of 2000. Panasonic Disc currently produces some 40 million DVDs annually, partly in conjunction with UNIVERSAL MUSIC GROUP (see Japan-U.S. Business Report No. 357, June 1999, p. 5).

At a cost of roughly $80 million, MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. will add capacity at its television picture tube facility in Troy, Ohio. The expansion will enable AMERICAN MATSUSHITA ELECTRONICS CO. to make MEI's new 32-inch and 36- inch Panasonic PureFlat flat-screen cathode-ray tubes for the world market. Production could start as soon as May 2000, with full operation of the extra capacity scheduled for the fall. The increase will create jobs for up to 200 people in addition to the 1,450 who already work at the plant. It also will boost MEI's investment in AMEC to more than $450 million. Opened in 1989, AMEC currently turns out 20-, 27-, 32- and 36-inch CRTs for Panasonic and other brands of TV sets as well as 7-inch and 9-inch CRTs for projection TVs.

SONY CORP. also is projecting continued strong gains in sales of its large TV sets in the United States, especially its flat-screen Wega series of products. To meet this anticipated demand, the company will invest between $19.4 million and $29.1 million to increase capacity at SONY ELECTRONICS, INC.'s Mount Pleasant, Pennsylvania large-screen CRT plant by anywhere from 20 percent to 30 percent. The plant, which has made TV picture tubes since 1994 and projection TVs since mid-1992, currently turns out roughly 600,000 picture tubes a year. Most of the new equipment and space will be used to boost output of 38-inch flat-screen CRTs for Wega models.

Continuing to push the liquid crystal display technology envelope, SHARP CORP. released the first product to incorporate its innovative continuous-grain silicon LCD know- how. The SharpVision LC-R60HDU is a 60-inch high-definition rear-projection display featuring three 2.6-inch continuous-grain silicon TFT LCD panels that provide a total resolution of 3.93 million pixels. Sharp claims a number of advantages for its new LCD technology over today's amorphous silicon and low-temperature polysilicon TFT technologies, starting with more life-like images, increased brightness and superior contrast. However, the real breakthrough, according to company engineers, is that by enabling high- speed devices to be formed on a single glass substrate, continuous-grain silicon LCD technology permits the development of ultrathin products, including multimedia mobile terminals and credit card-size communications tools. Sharp's Mahwah, New Jersey marketing unit priced the SharpVision LC-R60HDU at $50,000.

Starting in May, VICTOR CO. OF JAPAN, LTD. will put on the market a 61-inch rear- projection TV set capable of displaying 16:9 high-definition television signals. The distinguishing feature of the set, which will be priced around $6,000, is its D-ILA (direct-drive image light amplifier) projection technology. This advance in resolution is the result of work done by Carlsbad, California-based HUGHES-JVC TECHNOLOGY CORP. and JVC engineers in Japan. The joint venture effectively was dissolved in December when JVC consolidated all of its U.S. projector operations in JVC PROFESSIONAL PRODUCTS CO. of Wayne, New Jersey. That company will develop and market all future D-ILA projection systems, working on the R&D side with the recently established JVC Digital Image Technology Center in Carlsbad (see Japan-U.S. Business Report No. 360, September 1999, p. 5). JVC marked the reorganization by adding five portable projectors to its D-ILA line. The company claims that these HDTV-compatible products, like their D- ILA predecessors, deliver a picture quality that previously was available only with high-end theatrical or CRT-based projectors.

Operations will be restructured at Milpitas, California-based MEKTEC CORP. in an effort to pull the maker of flexible printed circuits out of the red. A subsidiary of NIPPON MEKTRON, LTD., the world's largest producer of flex circuits, the company began production in 1989. Recently, it opened a big manufacturing facility in Fremont, California that also allows it to help customers with design and prototyping. Mektec's sales totaled around $65 million in FY 1998, but it lost $6.9 million. One problem apparently is that many of the company's customers are doing more production overseas, thereby cutting revenues. Under the restructuring plan devised by NOK CORP., the parent of Nippon Mektec, the American unit will sell a vacant factory in Livermore, California. It also will cut its 530-person work force, which includes temporary workers, by a third to 360.

An exchange rate of ¥103=$1.00 was used in this report.

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Trader NICHIMEN CORP. quietly is building up the infrastructure to participate in a variety of U.S.-based financial services businesses. Last May, the company acquired New York City's COMMODORE CAPITAL CORP., an established investment banking firm that specializes in the transportation sector. Its expertise spans such areas as leveraged leasing, project financing, realty and other private market financing functions. Now, Nichimen has purchased Commodore Capital affiliate COMMODORE SECURITIES CORP., a registered broker/dealer. A big factor behind the latest acquisition, company sources say, was the desire to gain a mechanism to securitize equipment leasing claims held by Nichimen's principal American subsidiary. Commodore Securities, which, like Commodore Capital, retained its name and personnel, also could be a vehicle for securitizing the trading company's real estate assets.

With its business booming at home thanks to the recovering stock market, NOMURA SECURITIES CO., LTD. believes that it has the financial cushion to expand its wholesale operations in the United States and Europe. Those businesses were slashed when Japan's top broker/investment banker ran up a huge loss in FY 1998. To backstop its U.S. growth plans, Nomura Securities will boost the capital of Manhattan-headquartered NOMURA HOLDING AMERICA, INC. by $550 million to nearly $1.2 billion. That company's global capital markets activities are among the areas viewed as extremely promising. Nomura Securities also plans to set up a derivatives unit in New York City. Even before management formally decided that the securities house could afford to be more aggressive in the United States, it had moved into the private equity market (see Japan-U.S. Business Report No. 362, November 1999, p. 8).

TOKIO MARINE & FIRE INSURANCE CO., LTD. joined two other investors in FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. in buying approximately $113 million worth of common shares in the parent of bond insurer FINANCIAL SECURITY ASSURANCE INC. The purchase by Japan's top property and casualty insurer totaled roughly $38 million. New York City-based FSA Holdings will use the money raised to expand its core business, which is to guarantee scheduled payments of principal and interest on municipal bonds and asset-backed securities, including residential mortgage- backed securities. Since mid-1998, FSA and Tokio Marine have worked together in Japan to provide guarantees on asset-backed securities issued by domestic companies with high credit ratings.

An exchange rate of ¥103=$1.00 was used in this report.

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Less than three years after opening a plant in Garden Grove, California that had double the capacity of its former Los Angeles facility, the subsidiary of tofu producer HOUSE FOODS CORP. is bumping up against supply constraints. The factory now can turn out 150,000 packages of tofu a day, but after two additional production lines are added at a cost of $9.7 million, the plant will have the capacity to make 250,000 units daily. The new lines are scheduled to be operational in June. With demand for tofu increasing steadily in the United States, House Foods is talking about building a factory on the East Coast at some unspecified time.

Okinawa's ORION BREWERIES LTD. is testing the market in the United States for its Orion Premium Draft Beer. The Los Angeles subsidiary of a small trading company is handling sales, targeting them to Hawaii, San Francisco and New York City. The test volume, which was scheduled to be shipped before year-end 1999, was a limited 13,200 gallons. Depending on the market reaction, Orion Breweries will decide on 2000 shipments.

An exchange rate of ¥103=$1.00 was used in this report.

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Under what it describes as a policy of "selective consolidation," KOBE STEEL, LTD. signed a letter of intent to sell its half interest in LORAIN TUBULAR CO., LLC to partner USX CORP./U.S. STEEL. The joint venture, which operates two seamless steel pipe mills in Lorain, Ohio, was formed in August 1999 after 10-year-old USS/KOBE STEEL CO. sold its steel bar operations to REPUBLIC TECHNOLOGIES INTERNATIONAL, INC. (see Japan-U.S. Business Report No. 360, September 1999, p. 7). Both Kobe Steel and USX have a 15 percent share in this company. For the record, Kobe Steel said that it wanted to sell its stake in Lorain Tubular because that firm, the steelmaker's only involvement in the pipe business, had no synergies with its other operations. Industry insiders say, however, that questions about the profitability of the steel pipe manufacturer were the deciding factor.

U.S. production of aluminum substrates for computer drives' hard disks is another casualty of KOBE STEEL, LTD.'s "selective consolidation" strategy. Output of this product was due to end in January 2000 at KOBE PRECISION, INC. in Hayward, California. The plant, which the steelmaker acquired in 1988, can produce 7 million substrates a month, making it one of the world's largest suppliers. However, with hard drive manufacturers cramming ever-more capacity on disks, the substrate business has become increasingly difficult. The end of aluminum disk blanks will cost the jobs of roughly 350 of KPI's 450 employees. The remaining people are involved in KPI's silicon wafer reclamation operation. Kobe Precision diversified into this business, which has thrived from the start, in 1996. It now ranks as the top U.S. provider of recycled wafers to the semiconductor industry.

A somewhat defensive KOBE STEEL, LTD. is quick to point out that, these two developments notwithstanding, it is committed to production in the United States. One case in point is PRO-TEC COATING CO., a Leipsic, Ohio hot-dip galvanizing steel sheet joint venture with USX CORP./U.S. STEEL that started up a second galvanizing line in 1998. Another is the expansion planned at KOBELCO METAL POWDER OF AMERICA, INC. This Seymour, Indiana company, which began production in 1989, manufactures pure carbon and low-alloy steel powders used in powder metallurgy and powder forging applications, primarily by the automotive industry. Kobelco Metal Powder currently is operating at capacity, or 4,400 tons a month. A $3 million investment will give the company the ability to produce slightly more than 5,000 tons of steel powders a month. The extra capacity is expected to come onstream in the fall. NISSHO IWAI CORP. and SHINSHO CORP. are minority investors in Kobelco Metal Powder.

CADIC CORP., the developer of a novel process for producing ultrathin-wall stainless steel castings, formed CADIC TECHNOLOGIES INTERNATIONAL, INC. with AMSI, INC. of Dublin, Ohio to market its Cadic Convert Process investment casting technology to the North American foundry industry. The Kawasaki, Kanagawa prefecture company's technology is capable of making stainless steel castings with wall sizes as skinny as 1.8 millimeters. Cadic thinks that one of the main applications for the Cadic Convert Process will be lightweight car and truck exhaust manifolds because the high-temperature requirements of these parts limit the use of gray or ductile iron castings. GENERAL MOTORS CORP. reportedly plans to use Cadic-technology exhaust manifolds on some of its 2001-model- year products.

An exchange rate of ¥103=$1.00 was used in this report.

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In its first acquisition ever, big process control equipment maker YAMATAKE CORP. purchased the Cornerstone valve business from HUNT VALVE CO., INC. of Salem, Ohio for about $4.9 million. Ten-year-old Cornerstone will operate as a division of Yamatake's Houston-headquartered YCV CORP. subsidiary. It manufactures ball valves and rotary control valves for such applications as emergency shutoffs. Cornerstone's customers include major oil and gas producers, oil refiners, petrochemical manufacturers and electric utilities in the United States and Japan. Starting in April 2000, Yamatake will use Cornerstone's Houston plant to make its own control valves. Between the two product lines, the YCV Cornerstone operation expects sales of $22 million in FY 2001.

A contract for engine bearings from GENERAL MOTORS CORP. could add $3 million in first-year revenues to GLACIER DAIDO AMERICA, INC.'s business and considerably more in time. This Bellefontaine, Ohio company, formed in 1996, is a joint venture between DAIDO METAL CO., LTD. (30 percent) and, via an acquisition, bearing and automotive parts maker FEDERAL-MOGUL CORP. Glacier Daido's sales, estimated at $42 million in FY 1999, now are generated from shipments of engine bearings to HONDA MOTOR CO., LTD.'s engine plant in Anna, Ohio and TO-YOTA MOTOR CORP.'s Georgetown, Kentucky engine plant. Glacier Daido already has supplied prototype bearings to GM.

As part of its plan to boost overseas forklift sales by a fourth to $194.2 million in FY 2002, TCM CORP. (formerly Toyo Umpanki Co., Ltd.) will expand capacity at its 11-year-old West Columbia, South Carolina plant. Over three years starting in April 2000, TCM MANUFACTURING, USA, INC. gradually will raise annual lift truck capacity by about 40 percent to 5,000 units. The bulk of the extra output will be shipped to Latin America. Like its bigger Japanese competitors, TCM has seen forklift sales at home plunge because of lower capital spending.

From spring 2000, TOPY INDUSTRIES, LTD. will assemble and market undercarriage components for track-mounted construction equipment in Smyrna, Tennessee. The output of TOPY INTERNATIONAL UCA, INC., which will start off with six employees, will replace imported crawler assemblies. Growing sales of hydraulic shovels in the United States apparently persuaded Topy Industries to make the switch. Production is forecast at about 200 units monthly in FY 2001 for estimated annual revenues of $11.1 million. Topy International UCA initially expects to do business with Japanese-affiliated U.S. construction equipment manufactur-ers, but in time, it hopes to win contracts from American-based makers of track-mounted earthmoving equipment. Topy Industries has run a big steel and aluminum automotive wheel factory in Frankfort, Kentucky since 1986.

For the second time in about 16 months, SAKAI HEAVY INDUSTRIES, LTD., one of the world's three biggest makers of road-paving equipment, announced its intention to boost sales in North America, where the company has only about 5 percent of the market. At the heart of the first thrust was the introduction of equipment designed specifically for the United States and Canada. Now, Sakai's New Castle, Delaware subsidiary is focusing on building up its distribution channels. Over the next three years, it is targeting a 50 percent gain in dealers to 70 companies with 225 outlets. If all goes according to plan, Sakai's North American revenues will expand from an estimated $19.4 million in FY 1999 to $38.8 million in FY 2003.

FUJI SEIKI CO., LTD., a Nara prefecture manufacturer of plastic injection molds for such varied products as CD jewel boxes and automotive parts, is seriously weighing a move into the North American market. The company's products already are in use here because it supplies molds to a non-Japanese Asian firm that makes CD cases in the United States, but Fuji Seiki now has no direct marketing channel. Should it decide to take the plunge, Fuji Seiki would seek to develop markets for its precision molds among makers of syringes and other disposable medical products and producers of food containers, such as yogurt and pudding cups.

MATSUSHITA SEIKO CO., LTD. has set its sights on winning 10 percent of the American market for room air purifiers within three years of the start of marketing in the spring of 2000. Its initial line, which will be sold under the Panasonic brand by PANASONIC CONSUMER ELECTRONICS CO. of Secaucus, New Jersey, will consist of four models. Matsushita Seiko's optimism about its sales prospects is based on the fact that its air purifiers have features not found on the competition's. For instance, the slim high-end model not only has the standard high-efficiency HEPA and deodorizing filters but also a filter check function and a micro dust sensor that monitors air quality. Matsushita Seiko test-marketed its air purifiers for nearly a year before deciding to begin U.S. sales.

An exchange rate of ¥103=$1.00 was used in this report.

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In what both sides described as a win-win deal, NIKKISO CO., LTD. acquired the Microtrac particle-size measuring equipment line from a restructuring HONEYWELL INC. for approximately $5.2 million. Japan's top maker of pumps for the chemicals industry had been the exclusive Japanese distributor of Microtrac's laser-based products since 1979. The former Honeywell business will operate as MICROTRAC, INC. with headquarters in Montgomeryville, Pennsylvania, production facilities in York, Pennsylvania and a sales and service center in Clearwater, Florida. The 20-em-ployee company is projecting 2000 sales at $8 million or so and double that in 2003.

As soon as the spring of 2000, NIKON CORP. could introduce an English-language version of its image analysis support system in the United States. Designed to document deterioration in bridges, tunnels, buildings and other public structures and then to assess the causes and the extent of the damage, the system consists of Nikon's powerful D1 professional digital single-lens reflex camera and its GS-1 image analysis software. A recent series of incidents in Japan in which chunks of concrete from tunnel ceilings have fallen on railroad tracks has boosted sales of the system, which offers several advantages over visual inspection, including time-savings. Nikon expects that America's aging infrastructure will create a similarly strong demand for the product.

In January 2000, TOKKI CORP. will begin exports to the United States and Europe of a system that cleans the coating of optical fibers before they are attached to a connector. The Tokyo maker developed the system five years ago, but foreign interest in it has developed only recently with the surge in the laying of fiber-optical cables. NTT ADVANCED TECHNOLOGY CORP. has been entrusted with sales. Tokki estimates that American and European revenues from the cleaning system will be $582,500 the first year and $1.7 million the following year.

PRECISION SYSTEM SCIENCE CO., LTD., a Tokyo-based supplier of laboratory automation systems geared to the biotechnology field, has opened an office in Pleasanton, California in preparation for the launch of U.S. sales. Marketing should start soon after June 2000 when the office is upgraded to PSS BIO INSTRUMENTS, INC. At the heart of PSS's product line is the company's Magtration Technology, which uses magnetic particles for reaction and detection in various assay methodologies. Among the automated equipment that incorporates the Magtration Technology are nucleic acid extractors, chemiluminescence and bioluminescence immunoassay systems, and bacteria detection systems. PSS has sold some equipment to American companies from headquarters, but it sees an in-country presence as key to building sales.

For the third time in 1999, MARUBENI CORP. invested in a U.S. medical equipment start- up. This time, it was ACCURAY INC., the developer of the CyberKnife SRS (stereotactic radiosurgery system). The $2 million the trader put up gave it a 6.2 percent share of the Sunnyvale, California company. Accuray will use the money to develop more advanced versions of the CyberKnife SRS. This device allows highly focused beams of radiation to be applied to solid cancers while preserving the surrounding normal tissues from the destructive effects of the treatment. Marubeni was a natural investor in Accuray since it has marketing rights to the CyberKnife SRS in Japan and certain other East Asian countries. The other companies in which Marubeni has invested recently are INTUITIVE SURGICAL, INC. (see Japan-U.S. Business Report No. 358, July 1999, pp. 8-9) and R2 TECHNOLOGY, INC. (see Japan-U.S. Business Report No. 357, June 1999, p. 9).

FUKUDA DENSHI CO., LTD., Japan's top maker of electrocardiograms as well as a supplier of patient monitoring systems and ultrasonic scanners, will dissolve its indebted Redmond, Washington marketing subsidiary. Sales reportedly have slumped because of competition from lower-priced products. Maintenance on Fukuda Denshi's installed U.S. equipment will continue to be provided by another wholly owned subsidiary also located in Redmond.

An exchange rate of ¥103=$1.00 was used in this report.

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BALL SEMICONDUCTOR INC. has attracted considerable attention in the chip business because of its commercialization of technology that allows integrated circuits to be built on millimeter-size silicon spheres, one at a time and without the need for expensive clean rooms — breakthroughs that the Allen, Texas start-up estimates could slash the cost of IC production by up to 90 percent. Now, Ball Semiconductor, which was started by several Japanese semiconductor industry veterans, is attracting the notice of corporate Japan. YAMATAKE CORP., for one, formed a capital and technical alliance with the company. It invested $760,000, gaining a roughly 1 percent stake. The two also plan to collaborate on the application of Ball Semiconductor's technology to sensors, the area where the developer first expects to put its technology to use. Process control equipment manufacturer Yamatake reportedly is primarily interested in sensors to regulate heat and humidity in buildings. Prototypes could be ready as soon as the end of 2000.

Almost simultaneously, publicly traded JAPAN ASIA INVESTMENT CO., LTD., a pioneer in the venture-capital business in Japan, disclosed that it had raised close to $6 million to invest in BALL SEMICONDUCTOR INC. Participants in the fund include five unnamed companies listed on the first section of the Tokyo Stock Exchange as well as nine individuals. The Allen, Texas company, which has 60 people on staff now but is building up to a work force of 100, will use the money for R&D. It plans to go public in 2001.

For its part, YOKOGAWA ELECTRIC CORP., Japan's number one in process control equipment, is strengthening its relationship with SMAL CAMERA TECHNOLOGY, INC. The Cambridge, Massachusetts start-up is developing CMOS (complementary metal- oxide semiconductor) sensors as replacements for the more expensive CCDs (charge- coupled devices) now used in digital cameras. Seeing benefits to using CMOS CCD devices in cameras designed for monitoring, Yokogawa Electric invested $1.5 million in SMaL Camera last October, soon after it was formed. Now, the Japanese company says, it will invest a like amount in SMaL Camera by June 2000. That will make YEC the top investor in the venture business with a 43.8 percent stake.

In another transpacific tie-up in the sensor field, NAGANO KEIKI CO., LTD. and TEXAS INSTRUMENTS INC. have forged a cross-supply arrangement. Under it, the Tokyo manufacturer, one of the world's biggest suppliers of pressure sensors, will ship evaporation pressure sensors to TI, which will combine them with its own pressure transmitters for use in state-of-the-art automotive engines. Before this part of the deal can be implemented, however, Nagano Keiki must renegotiate a never-activated agreement it reached three years ago with DELPHI AUTOMOTIVE SYSTEMS CORP. that gave the big parts supplier exclusive sales rights to its pressure sensors for automotive applications. The flip side of the Nagano Keiki-TI alliance calls for the Japanese manufacturer to sell the American company's sensors at home.

An exchange rate of ¥103=$1.00 was used in this report.

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In one of the highest-profile investments yet made by SOFTBANK CORP. or its affiliates in American Internet start-ups, SOFTBANK VENTURE CAPITAL is partnering with KMART CORP. to help the number-three U.S. retailer build an electronic-commerce presence. Aptly named BLUELIGHT.COM, in which Kmart has an approximately 60 percent stake, will give consumers free Internet access and personalized portal and messaging pages as well as the opportunity to shop on-line. Softbank Venture Capital will back the San Francisco-based company with an investment of $62.5 million. SPINWAY, INC. of Palo Alto, California, which provides businesses with cobranded or private-label free dial-up Internet access to enable them to drive traffic to their sites and broaden brand identity, will be the source of's Internet connections. Personalized services, including Yahoo!Mail and Yahoo! Messenger, as well as news, sports and weather will be offered by big portal operator YAHOO! INC. under the My Yahoo!/ name. MARTHA STEWART LIVING OMNIMEDIA, INC., which already has a retail partnership with Kmart, will make an unspecified investment in The site is expected to be fully functional by late spring or early summer 2000.

Although eager to help Internet firms with promising ideas and sound business plans get off the ground, SOFTBANK VENTURE CAPITAL often is prepared to provide additional funding to businesses it backed initially. A case in point is ANYDAY.COM, INC., which allows people to organize their personal and professional lives on-line. Mountain View, California-based Softbank Venture Capital and another big U.S. venture-capital fund supplied $8 million last spring to enable to get started (see Japan-U.S. Business Report No. 357, June 1999, p. 10). Now, the two financing sources have invested another $12.5 million in the Cambridge, Massachusetts firm to facilitate its growth.

On-line entertainment and music businesses, particularly those that use streaming media technologies, are one focus of another major Japanese investor in Internet start-ups, TRANS COSMOS INC., and its Bellevue, Washington subsidiary. Two of the American unit's latest investments are in this category. It put $5 million into SOUNDSBIG.COM, INC., a Boston-based company that is building a comprehensive Internet broadcast network. At its Web site, listeners can find both established and emerging artists, chat with other listeners, get free MP3 downloads and buy CDs, while artists can connect directly with their fans. Trans Cosmos' U.S. unit also joined two other venture-capital firms, one of the world's biggest record companies and AMERICA ONLINE, INC. in a second round of financing for RIFFAGE.COM, INC. that raised $21 million. The Palo Alto, California firm will use the money for promotion and for emerging technologies that will further expand its site, which specializes in music by new bands and artists worldwide.

TRANS COSMOS INC.'s Bellevue, Washington unit also put up $1 million of the $3 million in seed money for ACADIO CORP. In early 2000, the Seattle company will launch a Web site for continuing education. It will offer a broad range of professional education and personal learning products and self-study materials as well as evaluation tools.

The newest investment by HIKARI TSUSHIN, INC., which rapidly is making a name for itself as a provider of start-up funding for Internet businesses and developers of communications software, adds a different dimension to its portfolio. The cellular phone distributor partnered with three other investors to raise $12.9 million in second-round financing for GLOBAL SIGHT CORP. Located in San Jose, California, this company gives firms the infrastructure, process and linguistic technologies to transform their English-language Web sites into multilingual, multicultural Internet presences. Global Sight earmarked the additional money for international expansion, product development and consulting and technical support services.

The amount was just $500,000, but this investment in NEED2BUY.COM, INC. introduced trader MITSUBISHI CORP. to the fast-expanding business-to-busi-ness on-line marketplace. The Westlake Village, California company's Web site, which currently is devoted to industrial electronic components, enables buyers to post requests for quotations for specific products. Need2Buy. com then uses a proprietary expert system to solicit bids from multiple vendors that meet the criteria specified in the RFQ. At present, more than 1,000 manufacturers of electronic components are directly linked to the site. The company also maintains a data base of all franchised distributors of electronic components. In conjunction with its investment, Mitsubishi agreed to help move into the Japanese market. The details still must be worked out, though. The money raised from Mitsubishi was part of a $2.2 million first round of financing for, which has been operation since May 1999.

MITSUBISHI CORP. also joined a group of firms that provided a total of $15.5 million in mezzanine funding for application service provider KINZAN. COM. Recently spun off from Internet services provider IXL, INC., Carlsbad, California-based is the supplier of the Siteman family of software and services. This package gives large organizations centralized control over extended networks of locally created e-com-merce Web sites.'s main targets are the business-to-business and business-to-consumer markets.

Cementing their relationship, ITOCHU TECHNO-SCIENCE CORP. invested an undisclosed amount in NETTECH SYSTEMS, INC., a supplier of middleware for mobile devices. Since last fall, CTC, as it often is called, has been the exclusive distributor in Japan of the Princeton, New Jersey firm's products. These enable anytime, anywhere mobile access to the Internet and enterprise data from any type of wireless device (see Japan- U.S. Business Report No. 361, October 1999, p. 32). As part of the latest deal, Nettech Systems bought Itochu Techno-Science's MobileWare division, which is a developer of complementary mobile middleware. No details were released about this transaction, either.

Four Japanese companies that see a market at home for EGROUPS, INC.'s Internet- based group communications services participated in a round of mezzanine investment that raised $42 million for the San Francisco business. Most of this money came from a group of big venture-capital funds, but the combined amount provided by publisher IMPRESS CORP., NTT-ME INFORMATION XING, INC., NOMURA SECURITIES CO., LTD. and RECRUIT CO., LTD. apparently was not inconsequential. eGroups currently serves more than 14 million people and hosts in excess of 280,000 e-mail affinity groups that exchange 1.4 billion-plus e-mails per month. It is adding new members at the rate of 1 million every 20 days. Last summer, eGroups established a subsidiary in Tokyo (see Japan-U.S. Business Report No. 358, July 1999, p. 26). It reportedly is signing up members at a fast clip for its Japanese-language on-line services.

Through its Panasonic Digital Concepts Center in Cupertino, California, MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. joined a number of high-profile investors, including SOFTBANK VENTURE CAPITAL, in putting an undisclosed amount of money into VSTREAM, INC. The Louisville, Colorado company offers collaborative Internet tools for businesses, such as on-demand conference calls, Web presentations and Webcasts. Vstream will use the PDCC money, which boosted its total financing to $100 million, to bolster its international expansion. The two also will explore opportunities to deliver Vstream's next generation of communications services to businesses and consumers worldwide.

A technology alliance among FUJITSU, LTD., San Jose, California-based SECURE COMPUTING CORP. and CYBER SIGN, INC., also located in San Jose, will provide government, finance and the B2B market with high-level but easy-to-use authentication security. Under the tie-up, Fujitsu is creating an application that seamlessly integrates the Cyber-SIGN handwritten signature biometric verification technology with Secure Computing's SafeWord authentication server. The software uses Cyber-SIGN authenticated handwritten signatures to invoke the SafeWord dynamic password, thereby providing strong security and local management of users accessing corporate extranets. Cyber SIGN is owned by Tokyo's CADIX INC.

In its second big transpacific business deal in as many months, KONAMI CO., LTD., the top publisher of interactive entertainment software in Japan, will market worldwide current and future interactive games developed by the Universal Interactive Studios division of UNIVERSAL STUDIOS, INC. All the games will be based on Universal Studios franchises. First up will be titles featuring story lines or characters from "The Mummy," "Universal Studios Monsters," "Dr Seuss' How the Grinch Stole Christmas" and "Woody Woodpecker." The games will be designed for multiple platforms, including the Sony PlayStation, the Sega Dreamcast, various Nintendo consoles and PCs. The deal will extend UIS's distribution reach since Konami has ties to all the main makers of video game machines. Konami recently agreed to produce a line of ESPN sports titles for video game consoles and PCs (see Japan-U.S. Business Report No. 363, December 1999, p. 12).

An exchange rate of ¥103=$1.00 was used in this report.

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The pending purchase of QUALCOMM INC.'s San Diego, California-based wireless handset manufacturing operations will catapult KYOCERA CORP. into the ranks of competitors right behind the three mobile phone world industry leaders. The cost of the acquisition, which involves operations that lost money on FY 1999 revenues of about $1.4 billion, was not disclosed. Industry analysts figure it is anywhere from $500 million to $1 billion. Qualcomm is the inventor of the CDMA (code-division multiple access) digital cellular network technology. Kyocera already is the top maker of CDMA handsets in Japan, supplying them to affiliate DDI CORP. as well as to IDO CORP. The purchase of the Qualcomm assets, which include inventories and customer commitments in addition to manufacturing equipment, will enable Kyocera to enter the North American mobile phone market in earnest. Its soon-to-be-formed KYOCERA WIRELESS CORP. unit will make handsets for sale under both the Kyocera and the Qualcomm brands. In the year through March 2001, the Japanese manufacturer's various production units expect to turn out 16 million wireless phones, double shipments to date. A significant feature of the transaction is Kyocera's commitment to purchase most of its CDMA chipsets and software from Qualcomm for five years as well as continue its existing royalty-bearing CDMA licensing agreement with the company. These sources of income are how recently high-flying Qualcomm plans to make money in the future. Under the deal, which is expected to close in February 2000, Kyocera Wireless will retain some employees of QUALCOMM PERSONAL ELECTRONICS, a manufacturing venture that Qualcomm and minority partner SONY CORP. formed in 1996 to make CDMA and PCS (personal communications services) handsets, and of Qualcomm Consumer Products. Kyocera, the world's biggest maker of ceramic packages for ICs, has operated a large factory in San Diego for nearly 30 years.

HITACHI ELECTRONICS, LTD. will build hardware on an original equipment manufacturer basis for COMSPACE CORP., the developer of the capacity-ex-panding, digital DC/MA (dynamic channel/multicar-rier architecture) technology for specialized mobile radio networks. The supply arrangement is part of an agreement designed to promote the worldwide introduction of products employing DC/MA technology at 800 MHz as well as at other frequency bands. CommSpace's DC/MA interface converts existing 25 kHz-spaced channels, such as those used in the 800-MHz frequency band, into eight digital voice/data pathways. Beyond DC/MA's capacity-boosting capabilities, the Irving, Texas company says that a major advantage of the technology is that wireless radio operators can use their existing sites and equipment. Testing of CommSpace's technology in Japan could occur within 2000.

In a contract win valued at $100 million over three years, HITACHI TELECOM (USA), INC. will supply its AMN (advanced multiservices network) ultrahigh-speed optical transmission equipment to US OPTICS, INC. for deployment in its West Coast network. Included in the order is DWDM (dense wavelength-division multiplexing) and OC-192 SONET (synchronous optical network) equipment. US Optics, a Los Angeles affiliate of BACKBONE COMMUNICATIONS INC., is an alternative ATM (asynchronous transfer mode) carrier. Its initial installation of Norcross, Georgia-based Hitachi Telecom's outage- proof four-fiber BLSR (bidirectional line-switched rings) will be in the San Francisco and L.A. areas. The network will operate over the fiber-optical facilities of participating utility companies.

Three months ahead of schedule, the northern section of Pacific Crossing-1, the first privately owned and operated transpacific undersea fiber-optic cable network, was completed and connected with a terrestrial system that runs from the PC-1 cable station in Ibaraki prefecture to Tokyo. Operation of this segment of PC-1 was scheduled to start before yearend 1999. The southern section of the advanced cable network, which will land in Mie prefecture and be linked with Osaka, is expected to be ready in the summer of 2000. At that point, PC-1 will form a 13,200-mile, four-fiber-pair, self-healing ring. The cable is designed to operate initially at 80 gigabits per second, but it is upgradable to 640 Gbps using DWDM technology. PC-1 is majority-owned by ASIA GLOBAL CROSSING LTD., itself a joint venture among GLOBAL CROSSING LTD., MICROSOFT CORP. and SOFTBANK CORP. (see Japan-U.S. Business Report No. 361, October 1999, pp. 32-33). MARUBENI CORP. owns roughly one-third of PC-1 through recently established GLOBAL BANDWIDTH SOLU-TIONS, INC. of New York City (see Japan- U.S. Business Report No. 363, December 1999, p. 13). TYCO SUBMARINE SYSTEMS LTD. is the prime contractor on PC-1; KDD SUBMARINE CABLE SYSTEMS INC. is the project's main subcontractor.

An exchange rate of ¥103=$1.00 was used in this report.

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The huge, helium-filled balloons for the next National Aeronautics and Space Administration environmental observation project will be made from fabric codeveloped by TEIJIN LTD. and DIMENSION POLYANT, INC. The 460-foot-diameter balloons, which will orbit the earth six times in about 100 days from some 32 miles up in the stratosphere, will carry about 4 tons of instrumentation. The base fabric for the balloons will be Teijin's lightweight but industrial-strength polyester Tetoron Powerrip. Putnam, Connecticut-based Dimension Polyant will laminate this fabric with polyester and polyethylene films, creating a five-layer material with a low moisture-absorption rate. The first of what is expected to be four NASA balloon launches a year is scheduled for December 2001.

An exchange rate of ¥103=$1.00 was used in this report.

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The innovative HONDA MOTOR CO., LTD. hybrid-powered Insight car went on sale in the United States in December. The powertrain for the high-mile-age two-seater combines a standard 1-liter, three-cylin-der gasoline engine with an electric motor that draws its power from a nickel-metal hydride battery pack charged by the engine. Honda expects to sell 400 Insights a month starting in March 2000, when a more adequate supply of cars will be available. The competing gasoline-electric hybrid Prius will arrive in TOYOTA MOTOR CORP. dealer showrooms in the spring.

HONDA MOTOR CO., LTD. could beat NISSAN MOTOR CO., LTD. as the first automotive maker to meet the California Air Resources Board's stringent super low emission vehicle standards for gasoline-powered vehicles (see Japan-U.S. Business Report No. 360, September 1999, p. 10). Honda had a January 2000 launch date for a SULEV version of its mainstay Accord sedan, which will emit little in the way of unburned hydrocarbons, nitrogen oxides and carbon dioxide vapors. Significantly, the SULEV variant of the Accord will be priced in the same general range as today's regular models. That is one reason Honda believes that it can sell 500 of the environmentally friendly Accords a month.

For a company that certainly could use extra North American production capacity, especially for its trucks, HONDA MOTOR CO., LTD. is taking its time in announcing details about its planned $400 million factory in Lincoln, Alabama (see Japan-U.S. Business Report No. 357, June 1999, pp. 11-12). At least the plant's operator now has a name: HONDA MANUFACTURING OF ALABAMA LLC. Whether the new company will build minivans or sport-utility vehicles when it starts assembly in the spring 2002 still has not been released.

Also bumping up against production ceilings in North America, TOYOTA MOTOR CORP. will add 200,000 units of capacity within five years to its current infrastructure for 1,250,000 vehicles. Most of the expansion will take place at Toyota's newest plant, the Tundra full-size pickup truck factory in Princeton, Indiana. About $800 million will be spent to double potential output at TOYOTA MOTOR MANUFACTURING INDIANA, INC. to 300,000 units a year by building a factory adjacent to the existing one. That facility only began Tundra production in December 1998 (see Japan-U.S. Business Report No. 352, January 1999, p. 8), working toward a full-capacity output of 100,000 pickups a year. In October 2000, TMMI will launch production of the Sequoia full-size sport-utility vehicle at an eventual annual rate of 50,000 units. Toyota apparently has not decided how it will use the new capacity coming on-line at TMMI, although more trucks are a strong possibility. Whatever is built there will boost employment from 2,000 or so currently and 2,300 once Sequoia output begins to 4,300 in the mid-2000s. The remaining 50,000 units of capacity that Toyota expects to add in North America will be squeezed out of one or more of its other plants. These are located in Georgetown, Kentucky (500,000 units of annual capacity), Fremont, California (400,000 units) and Cambridge, Ontario (200,000 units).

In a deal that would have been unimaginable not long ago, a fiercely self-reliant, technologically proud HONDA MOTOR CO., LTD. has agreed to a powertrain swap with GENERAL MOTORS CORP. Under it, the Japanese automotive maker, which bills itself as the world's biggest maker of internal-combustion engines with an output of more than 10 million units a year, will supply its V-6 ULEV (ultra low emission vehicle) engines and automatic transmissions to GM for use in North American-manufactured products. In turn, ISUZU MOTORS LTD., in which the number-one vehicle builder has a 49 percent stake, will ship direct fuel-injection diesel engines to Honda for sale principally in Europe. The engines presumably will come from Isuzu's new diesel engine factory in Poland. Honda does not produce diesel engines. Specific terms and details of each engine agreement still must be worked out. Honda and GM describe the cross-supply arrangement, which had been in the works for months, as the first step in a new relationship that could lead to cooperation in other areas, such as vehicle recycling in Europe and local parts procurement in different regions of the world. Against the backdrop of a rapidly consolidating international automotive industry, the head of Honda felt compelled to state that the company "is firmly committed to an independent path. This relationship will strengthen our ability to maintain this course." For his part, GM's president described the deal as part of the firm's "aggressive strategy" to tap the best global opportunities to bring innovative products to market quickly.

With orders increasing from FORD MOTOR CO. for torque converters for automatic transmissions, DAIKIN DRIVETRAIN COMPONENTS CORP. is forecasting higher production and sales in the next few years. Orders from Ford could hit 350,000 units a year in 2000 from 240,000 at present. That projected expansion plus DDC's sale of torque converters to NISSAN MOTOR CO., LTD.'s big assembly complex in Smyrna, Tennessee are expected to boost revenues from $35.9 million in FY 1998 to $50.5 million in FY 1999 and $61.2 million in FY 2000. More significantly, the Mascot, Tennessee subsidiary of EXEDY CORP. hopes to start making money, something that has eluded it since operations began in March 1996. To that end, DDC plans to raise local content to 72 percent from 67 percent, in part by investing $16.5 million to build additional torque converter components internally but also by purchasing other inputs from suppliers in the United States.

The strength of North American automotive production and the increasing recognition of the benefits of forged steel crankshafts are working to the benefit of INTERNATIONAL CRANKSHAFT INC. In operation since 1992, the Georgetown, Kentucky subsidiary of SUMITOMO METAL INDUSTRIES, LTD. currently makes 1.2 million forged crankshafts a year. In 2000, production will rise to 1.3 million units, bringing output close to the plant's annual capacity of 1.4 million units.

SAS RUBBER CO. of Painesville, Ohio has started deliveries of power steering hose to DAIMLERCHRYSLER AG for the Chrysler Cirrus sedan and the Chrysler Sebring coupe. The YOKOHAMA RUBBER CO., LTD. subsidiary already ships hose to FORD MOTOR CO.

Beginning in the summer of 2000, OTICS CORP. will ship such engine parts as rocker arms, rocker shafts and support parts to DMAX LTD. That timing is keyed to the August start of production of 6.6-liter, direct-injection diesel V-8 engines at the Moraine, Ohio venture between ISUZU MOTORS LTD. (60 percent) and GENERAL MOTORS CORP. (40 percent). The engines will be installed in GM's full-size pickups and other light- duty trucks. DMAX, which was formed in September 1998, expects to turn out 70,000 engines in its first year of operation, working up to full-capacity production of 200,000 units in 2004. Interestingly, the DMAX contract is the first business that Aichi prefecture-based Otics has done with Isuzu.

Encouraged by the contract that its Bardstown, Kentucky manufacturing unit won from GENERAL MOTORS CORP. for an integrated windshield washer system (see Japan- U.S. Business Report No. 360, September 1999, p. 10), JIDOSHA DENKI KOGYO CO., LTD. established a freestanding marketing unit in Detroit in the hope of doing more business with U.S. automotive makers. Until now, marketing had been handled by JIDECO OF BARDSTOWN, INC. as an adjunct to its production of power window motors, ABS (antilock braking system) motors and wiper motors. Jidosha Denki is a NISSAN MOTOR CO., LTD. affiliate.

With a $86.7 million order in hand from the Santa Clara Valley Transportation Authority for 30 light rail vehicle cars, the team made up of the Wellesley Hills, Massachusetts subsidiary of KINKI SHARYO CO., LTD. and ITOCHU CORP.'s New York City unit formed a company in San Jose, California to oversee the contract. The VTA car shells will be built in Japan and shipped to KINKI SHARYO INTERNATIONAL LLC for final assembly. The joint venture, in which the rolling stock maker has a 60 percent stake, is looking for a facility to use for this work. The 30 cars are scheduled for delivery to VTA in the latter part of 2001. They are said to be similar to the cars that Kinki Sharyo is delivering to New Jersey Transit under a 1998 contract. Those are 90 feet long and double-articulated. Under Buy America rules for federally funded transportation projects, about 60 percent of the value of the VTA light rail vehicles must be U.S.-derived.

Industry sources say that ISHIKAWAJIMA-HARI-MA HEAVY INDUSTRIES CO., LTD. will be a risk- and revenue-sharing partner on a multinational aircraft engine project headed by GENERAL ELECTRIC CO. The goal of the team is to design an engine to power 90- seat jetliners. The propulsion system of the CF34-10, a derivative of the CF34-8 engine for 70-seat planes, will be engineered to deliver 18,500 pounds of thrust, or about 30 percent more than the existing powerplant. IHI reportedly will be responsible for developing and producing 27 percent of the parts for the CF34-10. That undertaking will require an investment on the order of $291.3 million. KAWASAKI HEAVY INDUSTRIES, LTD., which worked on the CF34-8 engine, is expected to join the CF34-10 project, which has a 2002 date for the start of certification testing.

Passengers flying on any of six 747 jumbo jets owned by an unnamed airline will have access at their seats to inflight entertainment systems under a memorandum of understanding that BOEING CO. signed with SONY TRANS COM, INC. of Irvine, California. Options for up to 44 additional IFE systems also are covered by the deal. Sony Trans Com's P@ssport system is a full digital video on-demand entertainment unit. It also provides audio on demand as well as games, shopping and recently downloaded Web pages. SONY CORP. acquired the rechristened Sony Trans Com in 1989.

An exchange rate of ¥103=$1.00 was used in this report.

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Work will start in the spring of 2000 on a polycarbonate concrete admixture factory at NA INDUSTRIES, INC. in Chattanooga, Tennessee. Production at the 11,000-ton-a-year plant is slated for a year later. NIPPON SHOKUBAI CO., LTD.'s product, which is designed to make concrete stronger and more durable, requires less water than standard mixtures. In two or three years, Nippon Shokubai believes that its subsidiary can develop concrete admixtures in a $14.6 million to $19.4 million annual business. TAIHEIYO CEMENT CORP. also thinks that the U.S. admixture market has potential (see Japan-U.S. Business Report No. 363, December 1999, p. 14). For the last 11 years, NA Industries has made superabsorbent polymers. It is in the process of building a plant for the production of acrylic acid, a SAP raw material, in Pasadena, Texas with ELF ATOCHEM NORTH AMERICA, INC. The factory is scheduled for completion in late 2001.

SHOWA TECHNOCOAT, LTD.'s Clear Vision CV-1 will go on sale in the United States in the coming months. The product is a dust-resistant and water-dis-persing coating that can be applied to glass, plastic, painted and metal surfaces. CV-1 will be marketed by WEST BARON INC. of Scottsdale, Arizona, which was formed by the Tokyo-based manufacturer and other investors. Showa Technocoat will ship CV-1 concentrate to an unnamed American company. That firm will dilute it about 50 times and then package the liquid for sale. Roughly 1 million bottles are expected to be sold in the first year of marketing.

Gaining share in the U.S. market for golf equipment, particularly clubs, has been much harder than BRIDGESTONE SPORTS CO., LTD. expected despite a 15-year effort. The company's Covington, Georgia subsidiary consequently has revamped its marketing strategy. Rather than targeting intermediate players, it is refocusing its Precept brand toward the premium end of the business with a line of clubs and balls engineered specifically for Americans who are tour and club professionals and low-handicap amateurs. Last August, Bridgestone Sports introduced a titanium driver for this group of golfers. This club will be joined in February 2000 by Precept-brand irons and wedges and in March by a pair of fairway woods. The MC Tour Premium golf ball already is on the market. At present, roughly 90 percent of Bridgestone Sports' golf equipment sales in the United States are generated by balls.

ZIFF-DAVIS INC., in line with the strategy of parent SOFTBANK CORP., is shedding operations to concentrate resources on Internet-related businesses. It has agreed to sell ZIFF-DAVIS PUBLISHING CO. to a private equity investment firm for $780 million. The company, which had revenues of $782 million in 1998, is the largest U.S. publisher of magazines devoted to coverage of the computer and Internet industries, with PC Week, PC Computing and Yahoo! Internet Life among its titles. That was a primary reason for Softbank's 1996 purchase of Ziff-Davis since it had the same position in Japan's publishing world. According to the terms of the sale, which is expected to close in the first quarter of 2000, ZDNET INC., the Ziff-Davis Internet unit, will continue to use content from the various magazines for five years. At the same time, the buyer of the publishing company will not be able to tap the Internet to distribute information from the 80-odd titles it is acquiring without ZDNet's permission. Softbank owns approximately 70 percent of Ziff-Davis.

An exchange rate of ¥103=$1.00 was used in this report.

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American Companies in Japan


As soon as 2001, ABBOTT LABORATORIES and Japan development partner TAISHO PHARMACEUTICAL CO., LTD. could have on the market an antibiotic that shows promise of being effective against respiratory-track infections that do not respond to penicillin and macrolide-based treatments. Abbott Labs' ABT-773 ketolide antibiotic currently is in Phase II trials in the United States. Phase III clinical development will start sometime in 2000. Ketolides are new, semisynthetic derivatives of erythromycin A, an anti- infective that Abbott Labs helped to pioneer. DAINABOT CO., LTD., the U.S. company's subsidiary, will work with Taisho Pharmaceutical on the commercialization of ABT-773. Both will handle marketing of the drug once it is cleared for sale by the Ministry of Health and Welfare.

Bufferin, the aspirin product that BRISTOL-MYERS SQUIBB CO. licensed to LION CORP. for sale in Japan, soon could be in a tough fight to remain the top-selling over-the- counter painkiller. JOHNSON & JOHNSON has granted TAKEDA CHEMICAL INDUSTRIES, LTD. the right to market Tylenol, the world's most widely used nonprescription painkiller. Japan's top drug manufacturer expects to launch Tylenol sales for both adults and children in FY 2000 and to build it into the number-one painkiller within five years. Takeda Chemical's own such product, Grelan, produces sales of only between $970,900 and $1.9 million a year.

The first participant in the Kobe city government's Medical Industry City Project is the subsidiary of QUINTILES TRANSNATIONAL CORP., a major provider of contract pharmaceutical services (see Japan-U.S. Business Report No. 363, December 1999, p. 40). The Tokyo unit moved its treatment and test coordination business from Osaka to Kobe, apparently attracted by the city's offer of subsidized office rents and lower local taxes. As the program's name suggests, the Medical Industry City Project is an attempt by Kobe to develop the city into a medical technology center.

An exchange rate of ¥103=$1.00 was used in this report.

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Almost every month, IBM JAPAN LTD. has a new reason to be happy that it decided some time ago to sell to corporate Japan, particularly financial services providers, its ability to save them money by taking over their information technology systems. MUSASHINO BANK, LTD. is the latest business to outsource the development, maintenance, operation and management of its central data-processing equipment to IBM Japan. The 10-year contract, which will start in April 2000, will cost the midsize regional bank headquartered in Saitama prefecture approximately $262.1 million. However, Musashino Bank calculates that it will save roughly $48.5 million in direct operational expenses over that period. It also will be able to cut in half the staffing of its IT department. IBM Japan also will help the bank offer telephone and Internet banking services in the coming years.

One of the first decisions that IBM JAPAN LTD.'s new president made was to consolidate the company's three regional sales and marketing units into headquarters. The efficiency- enhancing move will take place February 1, 2000. Subsequently, IBM Japan's systems division will be in charge of major corporate accounts, while its general business division will handle marketing to small and midsize business customers.

The technical merits and the pricing of its higher-end ProLiant servers apparently have not enabled COMPAQ COMPUTER CORP.'s subsidiary to make inroads in the Unix-based server market as fast as it would like. To give users of Unix machines from the three biggest American suppliers and the top two Japanese vendors another reason to switch, Compaq is running a trade-in program through March 2000. Companies that have Unix servers that are less than four years old and that meet certain internal memory and hard-drive specifications are eligible to purchase discounted ProLiant 5500, 6400R, 8000 and 8500 servers. The residual value of their Unix servers is capped at $4,900.

Direct marketer GATEWAY, INC. is offering a complete menu of systems integration services to corporate customers — everything from design, network construction, and Internet connection and e-mail account setup to after-sale hardware and software support. These services are provided in conjunction with systems integration companies. .....In another strategy designed to build sales to business clients, GATEWAY, INC.'s subsidiary is giving customers that lease its PCs the option of buying investment protection. For an extra $60 or so a month per desktop unit, companies that lease 10 or more systems for two years can trade in half of the machines for new models after the first year and the rest a year later. The same type of trade-up program is available with three- year leases for an additional $45 per month per PC.

Just over two months after completing the purchase of SEQUENT COMPUTER SYSTEMS, INC., a leader in high-end systems based on the NUMA (non-uniform memory access) architecture, INTERNATIONAL BUSINESS MACHINES CORP. is rolling out in Japan as well as in the United States its new subsidiary's third-generation NUMA-Q 1000 and 2000 enterprise-class servers under the IBM logo. These machines harness the power of up to 64 Pentium processors, including the Pentium III Xeon, but operate as a single system in such settings as data centers. By the spring of 2000, IBM JAPAN LTD. will absorb the Japanese subsidiary of Beaverton, Oregon-based Sequent and form a NUMA-Q business unit to market and support the IBM NUMA-Q servers.

HEWLETT-PACKARD CO. has revamped its HP NetServer line to offer corporate workgroups, branch offices and fast-expanding small businesses an affordable server tailored to their requirements. The new HP NetServer LC 2000 family is designed to be easy to install, configure and upgrade while providing high availability and intelligent management. On the performance side, the HP NetServer LC 2000 can support one or two Pentium III processors running at 533 MHz, 600 MHz, 667 MHz or 733 MHz with a 133-MHz front-side bus. It also allows room for considerable growth with the capacity to handle 4 GB of PC133 synchronous dynamic random access memory, 144 GB of hard- drive storage and six open PCI (peripheral component interconnect) slots. HEWLETT- PACKARD JAPAN LTD. priced the HP NetServer LC 2000 from $4,500.

Corporate environments engaged in Windows NT-based 3D modeling and animation, rendering, nonlinear video editing and other types of digital content creation have new options from three suppliers of PC Workstations. The latest models in HEWLETT- PACKARD JAPAN LTD.'s high-end, dual processor-capable HP Kayak XU800 line feature 600EB-MHz, 667-MHz or 733-MHz Pentium III processors with a 133-MHz front- side bus and the Intel 840 chipset. They offer the choice of as much as 1 GB of Direct Rambus DRAM memory or 2 GB of SDRAM memory and 9.1 GB, 18 GB or 15 GB of hard-disk capacity depending on the technology selected. HP Kayak XU800 pricing now starts at $6,200.

DELL COMPUTER CORP. has established new, more affordable price points for PC Workstation computing while at the same time boosting processor performance and graphics power. Just $2,000 will buy a low-end Precision Workstation 220 with a 533EB- MHz Pentium III engine, a 133-MHz front-side bus and an Intel 820 chipset, plus fast RDRAM system memory. The Precision Workstation 420 costs just $1,000 more for a 600EB-MHz Pentium III and an Intel 840 chipset.

Professional 3D animators have a more powerful tool available thanks to GATEWAY, INC.'s decision to package San Antonio, Texas-based NEWTEK's localized LightWave 3D 5.6J 3D animation software with its E-5200 workstation. On the hardware side, the E- 5200CG, which lists for $4,500, includes a 600-MHz Pentium III processor and up to 1 GB of 100-MHz SDRAM memory.

Corporate buyers looking for top performance in a desktop system but at an affordable price have two more choices from DELL COMPUTER CORP.'s subsidiary. The latest member of the Dimension XPS B line is powered by an 800-MHz Pentium III processor with a 133-MHz front-side bus. Among other cutting-edge technology features, the system incorporates as much as 512 MB of RDRAM memory and 4X AGP (accelerated graphics port) graphics. Hard-drive storage is expandable to 40 GB. Yet, the Dimension XPS B800r starts at $2,700. Just a step down the technology ladder but several rungs lower in price is the newest Dimension XPS T model. It is built around a 750-MHz Pentium III and features up to 512 MB of SDRAM system memory and 40 GB of hard-drive capacity. However, the base configuration costs only $1,800.

For the real power user, DELL COMPUTER CORP.'s direct sales unit introduced the dual processor-capable OptiPlex GX300 with a 733-MHz Pentium III processor, including a 133-MHz front-side bus, the Intel 820 chipset and 256 KB of integrated L2 cache. The PC800 RDRAM system memory can be expanded up to 1 GB, while hard-drive storage runs from 10 GB to 30 GB. The estimated street prices of the new OptiPlex GX300 models go from $1,900 to $2,700.

COMPAQ COMPUTER CORP.'s latest entry in the price/performance desktop market is a pair of configure-to-order Prosignia Desktop 330 models. One uses a 600E-MHz Pentium III processor and the other a 700-MHz Pentium III chip. Otherwise, the range of options is the same: 64 MB to 384 MB of system memory, hard-drive capacities of 4.3 GB to 20 GB and Windows 2000 or Windows 98. The base configuration of the slower Prosignia Desktop 330 costs less than $1,800, while the 700-MHz version starts at $2,100.

The strength of demand in Japan, especially among consumers, for space-saving yet affordable desktop systems has caused one of the few departures from COMPAQ COMPUTER CORP.'s policy of selling the same products worldwide. With help from headquarters in Houston, Compaq's subsidiary developed the Deskpro EC. Featuring a 466-MHz Celeron processor and an 8-GB hard drive, the new product, which lists for $970, is claimed to be 20 percent smaller than space-saving models now available. Given the combination of size and price, Compaq figures that it can sell more than 100,000 Deskpro EC systems in 2000.


People in the market for a notebook computer have four new choices from DELL COMPUTER CORP. One is the Japan-only Inspiron 2000, which weighs in at just 3.5 pounds and measures a skinny 1 inch in height. A 400-MHz mobile Pentium III processor with 256 KB of L2 cache and a 440BX chipset are at the heart of this machine. It also features 64 MB of SDRAM memory, a 4.8-GB hard drive and a 12.1-inch active-matrix TFT display with a SVGA (super video graphics array) resolution of 800 x 600 pixels. A number of bells and whistles also are included in the $1,900 price of the Inspiron 2000. .....The specifications of the Inspiron 2000 match almost exactly those of the Latitude LS H400ST, whether the size and weight or the processor and display. However, this DELL COMPUTER CORP. notebook comes standard with 128 MB of SDRAM memory. A 6.4-GB hard drive also can be installed. Those upgrades boost the price of the Latitude LS H400ST to $2,800. .....People who do not want to spend that much have two other options from DELL COMPUTER CORP.'s subsidiary. The $1,800 Inspiron 3700 C433ST uses a 433-MHz implementation of the mobile Celeron processor and includes 32 MB of system memory and a 4.8-GB hard drive. The similarly equipped Inspiron 3700 C466ST with a faster 466-MHz processor goes for $2,000.

HEWLETT-PACKARD JAPAN LTD. hopes that the all-in-one design of its OmniBook XE2 enables it to stand out in the crowded market for business-targeted notebooks. Said to be ready to operate right out of the box, this machine offers a choice of 450-MHz or 500-MHz Pentium III, 366-MHz or 400-MHz mobile Pentium II or 433-MHz mobile Celeron processors, 32 MB or 64 MB of SDRAM expandable to 256 MB, a 4.8-GB or a 6-GB hard drive, and a 12.1-inch active-matrix TFT display with VGA resolution (800 x 600 pixels) or a 14.1-inch XGA active-matrix TFT display. Pricing of the OmniBook XE2 starts at $2,500.

Internet caching — the process of storing frequently accessed Web pages and Internet content on local servers to speed information access and lower network communications costs — is starting to catch on with Japan's server manufacturers. The primary beneficiary of this trend is NOVELL, INC. Last fall, the big software house licensed its Novell Internet Caching System to NEC CORP. (see Japan-U.S. Business Report No. 361, October 1999, p. 18). Now, Novell has added HITACHI, LTD. and TOSHIBA CORP. as licensees. Hitachi will develop an Internet caching appliance for the Japanese market based on the Hitachi Advanced Server HA 8000 Series. The platform for Toshiba's competing product, also destined for sale at home, will be the Magnia server series. The Magnia CS10 Cache Server, like the Hitachi appliance, will be marketed to companies of all sizes that operate e-business Web sites.

Before yearend 1999, the subsidiary of enterprise storage systems leader EMC CORP. expected to complete the integration of DATA GENERAL CORP.'s Japanese operations. The Hopkinton, Massachusetts manufacturer acquired DG in mid-October. The CLARiiON midrange storage business of DATA GENERAL JAPAN INC. will be merged into EMC JAPAN K.K., providing a complement to that company's high-end Symmetrix Enterprise Storage systems and software. Data General Japan will continue to operate as an independent division of EMC Japan. It will be responsible for selling, servicing and supporting the AViiON line of Windows NT and Unix server products. EMC Japan expects the addition of the DG storage line to help it double its market share to 20 percent.

Workgroup and departmental applications that require low-cost RAID (redundant array of independent disks) storage are the marketing focus of DELL COMPUTER CORP.'s PowerVault 211S floor-standing SCSI (small computer system interface) external storage system. The $3,700 unit features hot-plug hard drives, a splittable backplane for duplexing drives and scalability up to 108 GB using 9-GB drives or to double that amount with 18- GB drives.

The expanding HEWLETT-PACKARD JAPAN LTD. line of automated backup products now includes a model aimed at enterprise and departmental servers, where 18 GB to 80 GB of hard-disk storage needs to be backed up unattended. The HP SureStore DLT (digital linear tape) Autoloader 818 is powered by a DLT8000 drive. The $18,600 system provides 640 GB of capacity and a sustained transfer rate of up to 12 MB per second, both assuming a 2:1 data compression ratio.

In its second new product announcement in as many months (see Japan-U.S. Business Report No. 363, December 1999, p. 19), QUANTUM CORP.'s subsidiary introduced the Quantum Atlas 10K II. This 10,000-rotations-per-second SCSI drive is targeted at powerful workstations and servers as well as at high-transaction, data-intensive applications. It features a fast 4.7 millisecond average seek time, plus a sustained data throughput rate of up to 40 MB per second. The Atlas 10K II, which should be available in commercial quantities in Japan sometime in the spring of 2000, is built to handle capacities of 9.2 GB, 18.4 GB, 36.7 GB and a record 73.4 GB. Quantum's subsidiary set sample prices for OEM customers between $400 and $1,600.

In their third tie-up, MICROTEST INC. has tapped ARK INFORMATION SYSTEMS INC. to sell its DiscZerver VT, a Linux-based optical storage appliance, under the Tokyo company's brand name. The announcement of this deal coincided with the Phoenix, Arizona company's release of Japanese-language operating software for the VT that provides double-byte support for Japanese directory and file names. It also supports a fully localized version of the administrative user interface. The earlier distribution arrangements covered software for optical storage appliances — specifically, Microtest's Virtual CD, of which Ark has sold more than 150,000 copies since July 1997, and a localized version of DiscPort Executive for NT, which is used for enterprise device-sharing. Ark also will handle Microtest's LinuxZerver and the forthcoming FileZerver.

ZEN RESEARCH INC., the developer of the True-X and Multibeam technologies for improving optical disc drive performance, licensed SANYO ELECTRIC CO., LTD. to produce DVD Multibeam optical pickups for sale under its brand name. In simplified terms, the Cupertino, California firm's Multibeam technology enables DVD as well as CD drives to overcome the performance limitations of conventional single-beam technology. Zen Research has been working with KENWOOD CORP. to bring its TrueX know-how to the market. Their latest CD-ROM (read-only memory) drive has a read speed of 72X, a record (see Japan-U.S. Business Report No. 363, December 1999, p. 4).

The first company to offer a touch-enabled Apple iMac system in Japan is MICROTOUCH SYSTEMS, INC. TouchStation combines the Methuen, Massachusetts firm's extremely durable ClearTek 3000 capacitive touch screen and a USB controller with a standard iMac configuration. Available in all five iMac colors, this product is aimed at such public-access applications as self-service kiosks as well as interactive multimedia kiosks in the retail, business, government and entertainment markets. MicroTouch also expects TouchStation to be used in education. Its subsidiary priced the system at $2,100.

A San Jose, California start-up that develops fingerprint recognition systems formed a Tokyo subsidiary to market products based on biometrics technology, which uses a person's unique physical characteristics for personal identification and verification. SECUGEN CORP. has a 65 percent stake in the eponymous company. Accounting firm BUSINESS BRAIN SHOWA-OTA, INC. owns the rest of the joint venture. Its first job is to persuade PC manufacturers to integrate SecuGen's EyeD mouse, which is priced between $100 and $145, with their products. In time, though, the company will market the fingerprint recognition system to makers of door locks and automated teller machine cards.

MEDIAQ INC., the Santa Clara, California developer of the first LCD/CRT two- dimensional graphics controller with embedded DRAM for digital consumer electronic appliances (see Japan-U.S. Business Report No. 356, May 1999, p. 22), has scored a breakthrough. NEC CORP. will offer the initial devices incorporating the MQ-200. This technology will power new color display models in the NEC MobileGear series of handheld computing devices. These Japan-only products, MediaQ says, will have unprecedented levels of color, clarity and functionality, the latter including several Internet applications. They also will feature 10 hours of battery life.

An exchange rate of ¥103=$1.00 was used in this report.

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The subsidiary of top connector maker AMP INC., which soon will be brought under the local umbrella of TYCO ELECTRONICS CORP. (see Japan-U.S. Business Report No. 363, December 1999, p. 20), is marketing among other new products a line of 0.6-mm surface-mount-technology connectors for use in the parallel stacking of printed circuit boards, especially those going into notebook PCs and other products where miniaturization is essential. The eight models in the series, all of which have an enhanced electrical performance, differ in height, allowing the spacing between parallel boards to vary depending on the components to be packaged or the equipment design.

The AMERICAN POWER CONVERSION CORP. family of Smart-UPS uninterruptible power supplies for protecting server and network data and equipment when power fails now includes a low-end, Japan-tailored model for workgroup servers. That opens up a huge sales market for West Kingston, Rhode Island-based APC. The $680 Smart-UPS 700 provides battery backup for roughly 1 hour and 28 minutes. The other three models in the Smart-UPS series, all designed to work with Japan's 100-volt electrical system, deliver coverage for as long as 6 hours and 45 minutes. .....The popularity of the Linux operating system in Japan has reached the point where AMERICAN POWER CONVERSION CORP.'s marketing unit released a version of PowerChute plus that is compatible with RED HAT, INC.'s Linux 6.1. The program, which works with APC's Back-UPS Pro, Smart- UPS, Matrix-UPS and Symmetra Power Array UPS products, automatically shuts down Linux servers during extended power outages.

DIGITAL HARMONY TECHNOLOGIES INC. has lined up the first two Japanese consumer electronics manufacturers — NIPPON COLUMBIA CO., LTD., which sells under the Denon brand name, and ONKYO CORP. — for its hardware/firmware modules that add standards-based high-speed IEEE-1394 interfaces to audio/video devices. The Seattle firm's technology links together up to 63 home entertainment devices through a single, high-bandwidth cable connection. Both Nippon Columbia and Onkyo expect to release Digital Harmony-powered products in 2000.

Another Japanese maker of A/V products has licensed SPATIALIZER AUDIO LABORATORIES, INC.'s N-2-2 technology, which provides a virtual surround sound effect with just two front speakers, for a new line of DVD players. MARANTZ JAPAN, INC. will release three DVD players in the first quarter of 2000 that incorporate the Woodland Hills, California company's audio solution. The deal represents the first time that Marantz has adopted Spatializer's audio know-how.

An exchange rate of ¥103=$1.00 was used in this report.

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The completion of EXXON CORP.'s acquisition of longtime rival MOBIL CORP. will be followed in time by the consolidation of EXXON MOBIL CORP.'s eight affiliates in Japan. The resulting group will be a major player in Japan's struggling, low-profit oil industry. It will be second only to market leader NIPPON MITSUBISHI OIL CORP. in terms of sales and will have a combined refining capacity of 917,000 barrels per day. However, figuring out how to combine the eight operations to maximize efficiency will be a protracted process. ESSO SEKIYU K.K., a distributor wholly owned by the former Exxon, and GENERAL SEKIYU K.K., a refiner in which Exxon has a 50.1 percent stake, have been trying to do that for years (see Japan-U.S. Business Report No. 358, July 1999, p. 18) with mixed success. Now, six other companies will be involved in the planning, at least indirectly. The main players in addition to Esso Sekiyu and General Sekiyu are distributor MOBIL SEKIYU K.K., refiner TONEN CORP., owned 25 percent each by Exxon and Mobil, and KYOKUTO PETROLEUM INDUSTRIES, LTD., another refiner in which Mobil has a 50 percent stake. Rounding out the eight Exxon Mobil companies are a distributor and a refiner affiliated with Tonen, which itself has a daily refining capacity of 421,000 barrels, and a refiner majority-owned by General Sekiyu. The principals have established four business-specific committees to recommend strategies. Job losses are expected to result from the integration of overlapping functions, especially in the administrative and sales and marketing areas.

An exchange rate of ¥103=$1.00 was used in this report.

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No more definitive proof exists of the fundamental transformation underway in Japan's huge financial services sector than the government's basic agreement to sell nationalized LONG- TERM CREDIT BANK OF JAPAN, LTD. to an international consortium organized by RIPPLEWOOD HOLDINGS LLC (see Japan-U.S. Business Report No. 361, October 1999, pp. 20-21). Under the terms of the preliminary arrangement, which is expected to be finalized in March 2000, NEW LTCB PARTNERS C.V., as the group of global financial institutions acquiring LTCB is called, will pay $9.7 million for the 2.4 billion common shares of bank stock now held by Japan's Deposit Insurance Corp. The consortium also will pump close to $1.2 billion into LTCB to replenish its depleted capital. This will be accomplished through the purchase of new common shares. For its part, the government will spend at least $35.9 billion to clear the bad loans from LTCB's portfolio, thereby leaving New LTCB Partners with a package of loans that are considered sound. Among the financial services providers that believe that they jointly can turn around LTCB, which has assets in excess of $97.1 billion, are GE CAPITAL CORP., MELLON FINANCIAL CORP., PAINEWEBBER GROUP INC., the investment arm of TRAVELERS GROUP INC. and DEUTSCHE BANK AG. These companies and others participating in New LTCB Partners have recruited a list of notables, both Japanese and foreign, to be outside directors on the "new" LTCB's board of directors. The bank also will have a high-power team of senior advisers.

More evidence of the changes reshaping Japan's financial services sector is the announcement that NASDAQ Japan, an over-the-counter market for high-growth venture businesses, will debut as a separate section of the Osaka Securities Exchange as early as mid-2000. The NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. and its equal partner in NASDAQ JAPAN PLANNING CO., INC., big Internet player SOFTBANK CORP., worked out this memorandum of understanding with the OSE (see Japan-U.S. Business Report No. 362, November 1999, p. 20). Under the pending plan, the OSE will provide clearance and settlement services for the NASDAQ Japan market as well as market surveillance. It also will review applications from companies interested in listing their shares on NASDAQ Japan. In addition, Japan's number-two stock exchange will establish a data center and a communications center, plus it will set up a network linking more than 100 market participants in Japan to NASDAQ Japan. Among the other strengths that the OSE brings to the table is its computerized trading system, which will enable NASDAQ Japan to start operations sooner than the original target date of the fourth quarter of 2000. However, a new trading system will be installed by early 2001 as part of NASD's international rollout of an advanced platform. In time, NASDAQ Japan will allow Japanese investors to invest in NASDAQ-listed stocks, index products and other securities and derivatives. At launch, though, NASDAQ Japan will give investors the chance to participate in the initial public offerings of promising Japanese start-ups.

On-line investing in Japan still is in its infancy, but the main American players in this field as well as major Japanese financial services providers want to be positioned for growth that they hope will duplicate what is happening in the United States. The latest pairing joins TD WATERHOUSE GROUP, INC. and BANK OF TOKYO-MITSUBISHI, LTD., Japan's biggest commercial bank. The New York City company, the world's second-largest discount broker, will have a 45 percent interest in BTM-TD WATERHOUSE SECURITIES CO., LTD., which will offer individual investors such on-line financial services as discount brokerage services and equity trading. The joint venture, which will be staffed initially by 50 people, is eyeing a spring 2000 launch. The partners are talking to two BTM affiliates — TOKYO-MITSUBISHI PERSONAL SECURITIES CO., LTD. and KOKUSAI SECURITIES CO., LTD. — about participating in BTM-TD Waterhouse. Among other U.S. companies hoping to ride the growth in the in-line brokerage business in Japan are DLJDIRECT INC., the on-line brokerage unit of DONALDSON, LUFKIN & JENRETTE INC., E*TRADE GROUP, INC. and CHARLES SCHWAB & CO., INC.

Corporate America also sees money to be made in the financial advisory services market in Japan. The world's top accounting firm, PRICEWATERHOUSECOOPERS LLP, has just moved into this field, setting up a subsidiary in Tokyo to facilitate mergers and acquisitions and business turnarounds, particularly of banks and insurers. PWC FINANCIAL ADVISORY SERVICES CO., LTD., PwC's fifth subsidiary in Japan, is starting off with eight partners and 100 employees. It expects to have revenues of $30 million in the year through June 2000 and $40 million the following year. PwC FAS already has served as the lead adviser to ARTEMIS SA in the French firm's takeover of bankrupt AOBA LIFE INSURANCE CO. .....A heavyweight team also plans to go into the M&A advisory services business. Major broker/investment banker LEHMAN BROTHERS INC. and BANK OF TOKYO-MITSUBISHI, LTD. have reached basic agreement to tie up in this field and perhaps related ones (see Japan-U.S. Business Report No. 362, November 1999, p. 20). The pending partners did not give any time frame for when they expect to work out the details of their relationship.

STATE STREET BANK & TRUST CO. expects to have ready sometime in the first half of 2000 a localized version of its on-line foreign exchange trading system. Global Link enables institutional investors to trade currencies around the clock. It also allows them to buy or sell instantly. Boston's State Street expects Global Link, which already is used by more than 200 American and European institutional investors, to find a ready market in Japan as corporate and other investors try to minimize the foreign exchange risks associated with their often huge portfolios of offshore investments.

The financial problems of TOHO MUTUAL LIFE INSURANCE CO. allowed GE FINANCIAL ASSURANCE CO. to move lock, stock and barrel into Japan's enormous life insurance market in April 1998. That is when the consumer insurance arm of GE CAPITAL CORP. and Toho Mutual Life, through a complex deal, formed GE EDISON LIFE INSURANCE CO. to assume all new policy writing from the midsize insurer as well as almost all of its nationwide marketing staff. Toho Mutual Life was left with its existing policyholders' contracts and investment assets. That proved to be too much for the insurer, which collapsed in June 1999. Since then, the Life Insurance Policyholders Protection Corp., the industry's safety net organization, has been looking for a company to take over the policies and related assets. Enter GE Edison. Pending various approvals, expected to be received by March 2000, it will gain 1.6 million new policyholders and some $20 billion in assets. The PPC will contribute an estimated $3.6 billion as part of the transfer of the policies to GE Edison. Guaranteed returns will be slashed before then and early surrender fees will be added. For its part, Richmond, Virginia-headquartered GEFA will pump roughly $590 million into GE Edison to ensure that its solvency margin remains strong once it assumes the Toho Mutual Life policies.

AMERICAN EXPRESS CO. is partnering with YANASE & CO., LTD. to offer customers of the foreign car and truck dealer credit-card and asset-management services. Cardholders will be able to charge their purchases to their AmEx cards, which will have no credit limit. They also can obtain financial services from the Japanese operation of AMERICAN EXPRESS FINANCIAL ADVISORS INC. Moreover, for an extra $50 a year, cardholders will have access to emergency road services from Yanase, which sells GENERAL MOTORS CORP. vehicles among other foreign brands. A free e-mail service will be offered in the spring.

The spring 1999 decision by big equipment lessor COMDISCO, INC. to put more emphasis on buying and leasing back to semiconductor makers in Japan equipment already in their facilities (see Japan-U.S. Business Report No. 356, May 1999, p. 19) has paid its first major dividend. Under a four-year deal arranged by INDUSTRIAL BANK OF JAPAN, LTD., electronics giant NEC CORP. sold to Rosemount, Illinois-based Comdisco equipment worth about $271.8 million that was installed last fall at its Yamagata prefecture wafer-fabrica-tion plant and then leased it back. The transaction, which reportedly enabled NEC to recapture basically what it had paid for the equipment, was part of the big semiconductor manufacturer's restructuring plan.

An exchange rate of ¥103=$1.00 was used in this report.

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The number-three pizza chain in the United States hopes to replicate its success in Japan. LITTLE CAESAR ENTERPRISES, INC. signed a franchise agreement with a new, Tokyo-based company to open 400 restaurants over the next three years. Four Little Caesars Pizza outlets already are in operation in Niigata prefecture; others are on the drawing board. The Detroit firm has 1,100 directly owned restaurants and 3,050 franchised outlets in the United States, plus 250 stores in 17 foreign countries, including Japan.

An exchange rate of ¥103=$1.00 was used in this report.

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Under the terms of a 1994 agreement, HOWMET INTERNATIONAL, INC. is acquiring partner KOMATSU LTD.'s remaining interest in KOMATSU-HOWMET, LTD. The joint venture, located in Terai, Ishikawa prefecture, manufactures precision investment castings in nickel-, cobalt- and iron-based alloys for aerospace and industrial gas turbine applications. Komatsu-Howmet was formed in 1972 as an equally owned company. In July 1998, Greenwich, Connecticut-head-quartered Howmet, the world's largest producer of precision castings, increased its ownership stake to 81 percent. The buyout of Komatsu's remaining share is expected to be finalized in the spring of 2000. At that time, the name of the venture will be changed to HOWMET JAPAN, LTD.

An exchange rate of ¥103=$1.00 was used in this report.

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LIBERTY PRECISION INDUSTRIES, a supplier of flexible machining systems that has moved into other market segments, has expanded its three-year-old marketing relationship with HIRANO TECSEED CO., LTD. in the area of coating machinery, one of the Nara prefecture manufacturer's areas of expertise. Rochester, New York-based Liberty makes customized coating dies, stations and systems for film, medical, optics, pharmaceutical and other thin-film applications. The continuous-surface coating machine added to Hirano Tecseed's product lineup is used to make tape and special paper for electronics applications. It is priced between $1.2 million and $1.4 million.

With flip-chip packaging expected to become more widespread in the semiconductor industry, big spray systems manufacturer NORDSON CORP. has decided to set up separate from its Japanese marketing subsidiary a company to target sales of automated fluid dispensing systems made by its ASYMTEK, INC. unit to this emerging market. The first product ASYMTEK-NORDSON K.K. will introduce is the Millennium Series M-2000. This $339,800 platform dispenses flux, solder paste, underfill encapsulant, thermal compounds and lid sealant during the flip-chip package assembly process. Carlsbad, California-based Asymtek believes that Asymtek-Nordson will be able to sell 50 M-2000 systems in the first year of availability. The new company's marketing effort will be backed by a customer applications laboratory, also in Tokyo.

FOX INSTRUMENT AND AIR BEARING, INC., a Livermore, California specialist in precision electromechanics using air-bearing technology, named CKB CORP. as the exclusive distributor of its air bearings, air bearing spindles and other products. These components are designed to demanding submicron requirements, making them suitable for wafer steppers, inspection machines, microscopes and other types of precision equipment. Tokyo-based CKB is projecting annual sales at $970,900.

A line of extremely energy-efficient room air conditioners for offices and stores is being introduced by TOSHIBA CARRIER CORP. (see Japan-U.S. Business Report No. 356, May 1999, p. 20). Using 64 percent less electricity than the company's current products, the new models comply with energy-efficiency standards for air conditioners that will take effect in 2007. They also employ a new hydrofluorocarbon substitute. Toshiba Carrier plans to offer five wall-mounted or ceiling-mounted units in the $3,000 to $3,500 price range and a like number of outside units priced between $3,900 and $5,100.

An exchange rate of ¥103=$1.00 was used in this report.

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With companies and other organizations increasingly requiring their employees to have photo ID cards, the demand for identification pictures has spread beyond such traditional requirements as passports and drivers' licenses. Hoping to tap this demand, EASTMAN KODAK CO.'s subsidiary developed the Kodak Picture Maker J. Unlike the U.S.-sold product that has a similar name, this system uses a PC along with a Kodak digital camera with a 2.3-million-pixel resolution, a scanner, a printer and specialized software. The touch- screen display allows operators to enlarge or shrink a picture, remove red eye, adjust the color balance and brightness, and add a border. These and other capabilities mean that the system, which costs $280 a month on a four-year lease, can be used to make such other things as postcards and sticker pictures.

An exchange rate of ¥103=$1.00 was used in this report.

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World machine vision leader COGNEX CORP. has been on a roll in Japan recently. It latest order, worth $3.1 million, comes from TOKYO SEIMITSU CO., LTD. The Tokyo- headquartered manufacturer of semiconductor production equipment will integrate Cognex's machine vision with its wafer probe equipment, which enables chip makers to test circuits while they still are in wafer form, and with its wafer dicers, which cut wafers into individual ICs after testing. ....Mean-while, the subsidiary of Natick, Massachusetts-based COGNEX CORP. has introduced the acuReader/OCR III for next-generation 300-mm (12-inch) wafers. Like its predecessors, this system combines an optical character reader and automated lighting control to read serial numbers from wafers, no matter how degraded the characters are. The acuReader/OCR III, which can be used at any step in the production process and with all types of production equipment, is priced from $5,900.

Balanced amplifiers are expected to make inroads on SAW (surface acoustic wave) filters for noise suppression in third-generation, or wideband-CDMA, cellular phones. To measure these differential radio-fre-quency circuits, the marketing units of ATN MICROWAVE, INC. of North Billerica, Massachusetts and AGILENT TECHNOLOGIES INC. are offering a joint solution. It combines an ATN-4111A four-port network analyzer and one of several ATN network analyzer software packages with Agilent's 8753ES vector network analyzer, which also has a built-in S-parameter test set. The partners have priced their system at $92,200.

DAKOTA ULTRASONICS, a Santa Cruz, California manufacturer of industrial ultrasonic test equipment, adapted its USM-1 BoltMeter, which measures the actual clamp load produced by tightening a threaded fastener, to measure the clamping force of the tiebar located inside the clamping unit of injection molding and die-casting machines. Like the original, the Ultrasonic Tiebar Stress Management system achieves this measurement by determining the change in the transit time of an ultrasonic shock wave sent along the length of the tiebar as it is being tightened. Dakota Ultrasonics' subsidiary in Asaka, Saitama prefecture is importing the $24,300 machine for exclusive sale through HANEKA SHOKAI CO., LTD. The Nagoya distributor expects to sell 50 units in the first year.

To enhance the marketability of its DeltaV scalable process control system (see Japan- U.S. Business Report No. 354, March 1999, p. 21) in the very competitive Japanese market for this monitoring equipment, FISHER CONTROLS INTERNATIONAL, INC.'s subsidiary has contracted with SECOM TECHNO SERVICE CO., LTD. for service. FISHER-ROSEMOUNT JAPAN CO., LTD. has its own service network, but it is not extensive enough to give manufacturers of chemicals and other products that install process control systems in their factories confidence that if their DeltaV goes down, it can be returned to service quickly. Secom Techno will handle service calls for Fisher-Rosemount Japan equipment through its round-the-clock call center and some 60 offices across Japan.

FIKE CORP. of Blue Springs, Missouri gave NOHMI BOSAI LTD., Japan's top maker of fire alarms and other disaster prevention equipment, the right to import and sell its explosion suppression systems. The Fike system, which costs around $145,600, detects and chemically suppresses an explosion in its earliest stages to prevent the development of destructive pressures. It consists of a system controller, a solid-state pressure detector, suppressant containers, dispersion nozzles and a gas cartridge actuator. Nohmi Bosai will target sales to companies like chemical and pharmaceutical manufacturers that use dust collectors, pulverizers and dryers. It hopes to line up 10 buyers in the first year of marketing.

The subsidiary of major videoconferencing systems maker PICTURETEL CORP. is working with JOHNSON & JOHNSON K.K. to market the MedLink interactive telemedicine workstation to hospitals for use in their emergency rooms and clinics. The mobile videoconferencing unit, priced around $77,700, enables a remote specialist to meet face- to-face with a patient and other medical practitioners. MedLink is based on PictureTel's network-independent Venue 2000 Model 50 platform. It is integrated with a high-resolution monitor displaying 30 frames per second. The clinician uses a wire-less microphone for hands-off, natural speech. Keio University Hospital in Tokyo and a hospital in Kawasaki, Kanagawa prefecture already are testing the system, leading to what PictureTel hopes will be the first two of 200 MedLink orders a year.

This is one of the first tie-ups forged by JOHNSON & JOHNSON K.K. since it absorbed the formerly freestanding business unit that had been responsible for sales of medical devices and equipment (see Japan-U.S. Business Report No. 361, October 1999, p. 23). In a simultaneous move, the company said that it would start leasing surgical, telemedicine and other cutting-edge medical equipment to hospitals and related health-care facilities in cooperation with DIAMOND LEASE CO., LTD. Japan's number-two equipment leasing company will be responsible for approving contracts and collecting payments. Given the high price of state-of-the-art medical equipment and the increasing cost-containment pressures on medical institutions, J&J is betting that more hospitals will see leasing as an effective alternative.

Two more hospitals will use INTEGRATED SURGICAL SYSTEMS, INC.'s ROBODOC Surgical Assistant System for orthopedic applications. The computer-controlled, image- directed robotic product is designed especially to perform total hip replacement surgeries, although that ROBODOC application has not yet been approved by the Health and Welfare Ministry. The Tokyo subsidiary of South San Francisco, California-based IMATRON INC. is the exclusive distributor of ROBODOC. It expects to install the two systems on order during the first quarter of 2000. Imatron also markets the Davis, California company's NeuroMate System, a surgical robotic tool for use in minimally invasive brain surgeries.

Surgeons have some new options for the treatment of coronary artery disease. For starters, MHW approved for marketing MEDTRONIC, INC.'s S670 with Discrete Technology Coronary Stent System. According to the Minneapolis company, this product, designed to cross very tight lesions, represents the state of the art in interventional cardiology. It joins the GFX2 and S540 stent systems and the D114s balloon catheter from Medtronic AVE (formerly Arterial Vascular Engineering, Inc.). Other Medtronic products available in Japan for the treatment of cardiovascular disease include guiding catheters, steerable guidewires, balloon dilation catheters and accessories for angioplasty procedures. .....An-other new treatment option in what is the world's second-largest market for interventional cardiology products comes from BOSTON SCIENTIFIC CORP. Its NIR w/SOX stent delivery system also has been cleared for sale. The Natick, Massachusetts firm's subsidiary will ship the over-the-wire version in the first quarter of 2000; the Monorail (rapid exchange) system will be launched later in the year. Boston Scientific executives say that clinical experience indicates that physicians prefer to use a stent that includes a securement system, such as its SOX technology.

The first INTRATHERAPEUTICS, INC. product to receive MHW's marketing go-ahead is the IntraStent Biliary Endoprosthesis. Made of steel and balloon-ex-pandable, it is used to eliminate blockages in patients with obstructed bile ducts. The St. Paul, Minnesota company, which specializes in the treatment of peripheral vascular disease and nonvascular obstructions, is using GETZ BROS. CO., LTD. as its distributor.

DIAGNOSTICS PRODUCTS CORP. and DAINIPPON INK AND CHEMICALS, INC., the Los Angeles firm's equal partner in NIPPON DPC CORP., have sold the Chiba prefecture-based company to IATRON LABORATORIES, INC. for an undisclosed price. DPC and DIC formed the joint venture in 1986 to market and manufacture DPC's immunodiagnostic test kits. Nippon DPC has annual sales of approximately $19.4 million. DIC reportedly concluded, however, that selling test kits without the related diagnostic equipment was not a growth business. Iatron Labs, a maker of clinical reagents and instruments, will continue to distribute DPC's test kits. The Tokyo company believes that by using the marketing channels established by Nippon DPC, it can double sales of DPC's products in a few years. Most of the joint venture's 60 employees came from DIC and have returned to the world's largest maker of printing inks.

An exchange rate of ¥103=$1.00 was used in this report.

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Effective January 1, TEXAS INSTRUMENTS INC.'s subsidiary absorbed the Texas Instruments Tsukuba Research & Development Center in Ibaraki prefecture. Headquarters in Dallas previously had owned and operated the facility. .....TEXAS INSTRUMENTS INC. is sampling in Japan and elsewhere four additions to its MSP430 line of low-power, embedded flash memory microcontrollers. Two of the products are extensions of TI's existing MSP430 family of 16-bit RISC (reduced instruction-set computing) MCUs. They feature 4 kilobytes of flash memory and have an operating range of 1.8 volts to 3.6 volts and 2.2 volts to 3.6 volts, respectively. Performance runs up to 8 million instructions per second. The other two devices offer the same functionality, but they have only 1 KB of flash memory. These parts are sampled-priced in volume at the equivalent of just 99 cents each.

It might be the world leader in programmable logic devices, but in Japan, San Jose, California-based XILINX, INC. trails crosstown rival ALTERA CORP. In an effort to reverse these rankings, Xilinx's subsidiary plans to double its marketing and engineering staff to 60 people by the end of its 2000 business year. This increase, the company figures, should help it boost sales of PLDs, which now run around $126.2 million a year, by at least 20 percent annually. Much of Xilinx's marketing strategy focuses on its year-old Virtex series of field-programmable gate arrays. This line currently consists of 20 members that range from 50,000 system gates to 3.2 million. According to Xilinx, these products deliver a performance that previously was achievable only with an ASIC (application-specific IC) solution.

INTERNATIONAL RECTIFIER CORP. also has its sights set on higher sales in Japan. In fact, the El Segundo, California manufacturer has mapped out plans to double sales, which totaled $63.1 million in the year through June 1999, within three years. One fundamental change underway is to switch marketing strategy from sales exclusively through distributors to direct sales supplemented by agent sales. IR also will put more emphasis on sales of high-efficiency power semiconductors, one of its strengths, and other value-added products. The third part of its plan calls for boosting the share of sales generated by devices that are less than a year old to 45 percent by June 2001 from under 20 percent at present. .....One part that could help INTERNATIONAL RECTIFIER CORP.'s subsidiary shift its sales mix is the IR2171 linear current-sensing IC. Designed for motor-drive applications, this power-conserving device senses the motor phase current through an external shunt resistor, converts the signal from analog to digital and then transfers the signal to the low side. Expected uses of the IR2171, which is sample-priced at $3.90, are inverter power sources and AC servos.

Two integrated, high-voltage CRT driver circuits are on the market from NATIONAL SEMICONDUCTOR CORP.'s subsidiary. The LM2412, which costs $5.10, and the $4.10 LM2413 are both designed for color monitors that have a resolution of up to 1600 x 1200 pixels. That technology exceeds today's mainstream high-end resolution of 1280 x 1024 pixels (SXGA or super extended graphics array) and even the coming generation of 1400 x 1050 pixels (SXGA+). The primary difference between the pair of devices is the speed at which they operate.

LINEAR TECHNOLOGY CORP.'s marketing arm has introduced a trio of operational amplifiers. The LT1782 is a 200-kilohertz device that operates in the range of 2.5 volts to 18 volts. For applications requiring higher power — 1.2 MHz — but the same voltage range, there is the LT1783. The third product, the LT1637, has a gain-bandwidth of 1.1 MHz but draws little current; it works with power supplies with a total voltage of 2.7 volts to 44 volts. New to the market as well from the subsidiary of the Milpitas, California manufacturer is a 12-bit sampling analog/digital converter. The LTC1420 draws only 250 milliwatts from either single or dual 5-volt power supplies. It is priced at $6.95 per unit.

COMPETITIVE TECHNOLOGIES, INC., which specializes in identifying promising technologies in such fields as digital electronics and then developing and commercializing them, licensed MATSUSHITA ELECTRONICS CORP. to use on a nonexclusive basis its high-powered laser diode know-how. According to the Fairfield, Connecticut company, this technology increases the performance and the durability of lasers used in DVD drives and other optical storage equipment, thereby obviating the common problem of low reliability during long-term operation.

The world's largest maker of semiconductor production equipment sees money to be made in helping Japan's big IC manufacturers integrate the various types of machines they buy from different suppliers. This job has become more time-consuming as the complexity of chip production has increased. APPLIED MATERIALS, INC.'s subsidiary offers integration packages that cover a wide variety of processes. Obviously, though, AMI hopes to persuade semiconductor producers that they can avoid many of their integration headaches by purchasing its equipment, which includes not only deposition equipment but systems for a number of other production steps.

With device geometries now down to 0.18-micron on high-speed processors and headed lower, industry experts project a switchover to copper from aluminum for interconnections. That prospect, SEMITOOL, INC. believes, could help it roughly double sales in Japan to $58.3 million in the year through September 2000. Among its products, the Kalispell, Montana company supplies electrochemical copper deposition tools that are said to produce high-purity copper films with superior uniformity. Semitool's Tokyo subsidiary began direct sales in October 1998 after using a distributor for 11 years.

One company that can attest to the fact that investment in semiconductor production equipment is on the upswing again in Japan is ASYST TECHNOLOGIES, INC. Among the Fremont, California supplier's latest contracts are two multimillion-dollar orders for standard mechanical interface-based automation equipment for wafer fabrication facilities. One of the deals involves SMIF-based equipment for a fab under construction that will produce digital and analog devices with geometries as narrow as 0.15 micron. The other is for a facility that is migrating its production process from 150-mm (6-inch) wafers to 200-mm (8-inch) wafers and also moving from open cassettes to SMIF technology. Asyst is convinced that as design rules shrink, demand for SMIF automation technology will expand because of its ability to reduce contamination-related yield loss and due to its productivity benefits. To ensure that it fully capitalizes on these opportunities, the company is on its way to acquiring a majority position in a Nagoya manufacturer of robotics systems used to automate chip and flat-panel display manufacturing tools (see Japan-U.S. Business Report No. 361, October 1999, p. 24).

FEI CO. has teamed with TOKYO ELECTRON LTD., Japan's top maker of semiconductor manufacturing equipment, for sales of its focused ion beam and DualBeam scanning electron microscopes. The Hillsboro, Oregon firm's products provide accurate 3D measurements of critical dimensions and deliver feedback on process defects early in the manufacturing process. FEI, too, believes that as device geometries shrink and make production inherently more difficult, demand will expand for its broad range of metrology, analysis and structural process control equipment since these tools can boost yields and, thereby, lower overall costs. TEL is of the same mind. It is forecasting annual sales of $97.1 million for FEI's equipment in three years.

Another supplier of metrology equipment also has moved into the Japanese market. BOXER CROSS INC. of Menlo Park, California signed HAKUTO CO., LTD. to distribute its BX-10 Advanced Implant Monitor. This $970,900 automated tool can be used not only for monitoring the depth uniformity of shallow doped layers over the full area of a wafer but also for measuring surface roughness at the micro level. Unlike most other characterization techniques, the BX-10 is designed for in-line production use. Moreover, the measurements are noncontact and, thus, nondestructive and can be performed directly on both 200-mm and 300-mm production wafers. Hakuto forecasts that it can sell five of Boxer Cross' systems in the first year of marketing and 15 annually after three years.

Big automatic test equipment supplier TERADYNE, INC. sold a 1,024-pin configuration of its J973 VLSI Test System to the Kumamoto prefecture manufacturing affiliate of MITSUBISHI ELECTRIC CORP. for commercial testing of complex logic devices. The MELCO unit had been using the tester in engineering development and for trial output of high-performance ASIC devices for computing and networking applications. Boston- headquartered Teradyne says that one advantage of the system, which cost a reported $5.8 million, is that it can economically test low-pin-count very large-scale integrated devices in parallel with cutting-edge, high-pin-count VLSI circuits. .....TERADYNE, INC. will be going head-to-head with Japanese market ATE leader ADVANTEST CORP. when it begins full-scale marketing within 2000 of test systems for flash memories and CCDs. Both testers are derived from Teradyne's high-performance, general-purpose J750 VLSI Test System.

The marketing unit of AGILENT TECHNOLOGIES INC. has on the market a system designed specifically to reduce the cost of testing radio-frequency power amplifiers used in digital cellular and PCS or PHS (personal handyphone system) handsets. The Agilent 84000 Series Model A20e, the Palo Alto, California parent claims, enables manufacturers of power amplifier ICs to maximize throughput, minimize floor space and cut time to market. The dedicated function of this model makes it unique among the members of the Agilent 84000 family, which can test a variety of devices.

SUMITOMO 3M LTD. is projecting first-year sales of $1.5 million for a pair of sockets used to test direct Rambus DRAMs and other cutting-edge memories. One product tests these devices in quad flat packs at up to 6 GHz. It lists for $4,900. The other, priced at $8,700, tests chips in ball grid array packages at speeds as high as 10 GHz.

With the acquisition of several U.S. producers of semiconductor wafer-processing components made from ceramics, COORSTEK, INC. (formerly Coors Ceramics Co.) has decided to expand its business into Japan. The Golden, Colorado manufacturer tapped the subsidiary of GREENE, TWEED & CO. to handle marketing of ceramic components for such applications as sputtering, implant, etch, chemical and physical vapor deposition and thin-film deposition. Sales are forecast at a modest $970,900 the first year but are expected to reach $9.7 million in 2005. Kurpsville, Pennsylvania-based Greene, Tweed manufactures speciality seals, including ones used in various semiconductor production processes, and engineered plastic components.

An exchange rate of ¥103=$1.00 was used in this report.

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Seeking to find synergies by appealing to their existing audiences, the Tokyo subsidiary of WOMEN. COM NETWORKS, INC. (see Japan-U.S. Business Report No. 360, September 1999, p. 22) and AOL JAPAN INC. jointly will plan and develop a new Web site designed for the ISP's female users. The first codeveloped area, Life-Up Clinic, went on-line in mid-December 1999. It features a new version of's popular "Ask The Experts!" Japanese advice chat group, where persons knowledgeable in a wide range of fields answer questions chosen at random. The partners plan to hold on-line talk shows, seminars and other events focused on women and women's issues.

In a similar vein but with a different focus, HEALTHEON/WEBMD, INC. and SOFTBANK PUBLISHING INC. announced plans to found a company to distribute medical information and services to physicians and consumers via the Internet. WEBMD JAPAN K.K., in which the Atlanta-based Internet health-care company will have a 40 percent stake, will localize Healtheon/WebMD's comprehensive medical Web content and supplement it with local medical news and information. The WebMD Japan site, targeted to be operational in the summer of 2000, will be free to consumers but marketed to medical professionals on a subscription basis.

To distinguish their planned Internet music Web site from the competition, Seattle's REALNETWORKS, INC. and SUMITOMO CORP. will focus on delivering a one-to-one on-line experience by filtering content according to the customer's tastes. The Web site will connect visitors not only to a large selection of music recordings but to related fan clubs, events and affinity products as well. Sumitomo will focus on delivering the new content via its broadband infrastructure, which includes affiliations with @HOME CORP., CROSSBEAM NETWORKS CORP. and LYCOS, INC.'s local portal. If the Japan- targeted content strikes a chord with users, the partners may explore adapting it to serve other Asian markets. RealNetworks will have a 51 percent interest in the proposed joint venture, which expects to open its music destination site in February 2000. Cybermall operator US-STYLE.COM INC. has opened an area on its existing virtual retail site aimed at Japanese consumers (see Japan-U.S. Business Report No. 357, June 1999, p. 22). Not only do they have access to a wide range of American products at U.S. prices with all content and support in Japanese, but users can e-mail questions to vendors in their native tongue, have their inquiries translated into English and receive a response in Japanese within 24 hours. With a prime cyber site on YAHOO! JAPAN CORP.'s market- leading portal, expects to hear the virtual cash register ring.

AUTOBYTEL.COM INC. is revving up its on-line car and truck sales site (see Japan-U.S. Business Report No. 362, November 1999, p. 26) with new financial backing from GE CAPITAL CORP. The world's largest nonbank financial institution bought a $3.1 million stake in's subsidiary and, via its JAPAN LEASE AUTO CORP. unit (see Japan-U.S. Business Report No. 358, July 1999, p. 20), will be in charge of the site's vehicle leasing services. Relatively few automotive buyers in Japan lease their vehicles. With Japan Lease's help, Autobytel is out to change that.

Targeting soaring demand for world-class Web sites, New York City-based RENAISSANCE MULTIMEDIA has begun offering Internet development services in Japan and the rest of Asia. In cooperation with a group of Japanese investors, the "Silicon Alley" digital design and communications company set up an office to provide comprehensive consulting and Internet-based strategic planning. This advice merges sophisticated sites with localized strategies.

With Web-site performance and user-friendliness becoming increasingly important to companies' bottom lines, HEWLETT-PACKARD JAPAN LTD. is selling a localized version of its parent's Web-site evaluation and performance-tracking package. Designed to work with HP's OpenView enterprise computing management platform, VantagePoint Web Transaction Observer tests and grades Web sites from a user's perspective, developing reports and business intelligence from simulated and actual Web-site use. The package is priced from $51,300.

The migration of business activities to the Web now extends to the preparation and publishing of regulatory compliance information and approval applications, thanks to a new software package from ESPS, INC. The Fort Washington, Pennsylvania firm's CoreDossier allows users to efficiently plan, publish and share large volumes of information, such as that related to pharmaceutical testing and approval. COMPAQ COMPUTER CORP.'s arm will serve as ESPS's systems integrator. It has begun selling the English version of CoreDossier to pharmaceutical and biotechnology companies; a Japanese version will follow shortly.

The market for business-to-business e-commerce software and services continues to attract aspirants. ECCELERATE.COM, a new, wholly owned unit of DUN & BRADSTREET CORP., has teamed with MITSUBISHI CORP. to bring its B2B products and services to Japan.'s Smart Transactions system embeds D&B D-U-N-S Numbers — a unique number used to identify companies — within its digital certificates. That not only ensures security but allows users to safely identify trading partners, tailor services to specific clients and manage transactions individually using rule-based algorithms. Mitsubishi will deploy's customer identification and business credentials system throughout its global trading network as well as work with its American partner to localize the software and market it to other Japanese companies.

Focusing on providing the infrastructure that powers B2B e-commerce, iPlanet partners SUN MICROSYSTEMS, INC. and AMERICA ONLINE, INC.'s Netscape Communications unit are offering localized versions of their codeveloped ECXpert electronic data interchange server, which costs $48,500, and the $38,800 TradingXpert Internet trading community package. Part of iPlanet's E-Commerce Solutions suite of software and services, the two modules provide a highly scalable, robust and secure platform for B2B transactions.

INTERNATIONAL BUSINESS MACHINES CORP. and its TIVOLI SYSTEMS INC. affiliate will provide the nuts and bolts as well as the brainpower behind NTT COMMUNICATIONS CORP.'s e-business outsourcing service. IBM will supply its server and e-business technologies, while Tivoli will contribute comprehensive enterprise management software. The wholly owned NIPPON TELEGRAPH AND TELEPHONE CORP. unit signed a four-year contract with the two companies. It expects the new business, which has an April 2000 start date, to ring up sales of more than $1 billion. This deal complements NTT Communications' earlier arrangement with COMPUTER ASSOCIATES INTERNATIONAL, INC. on IT management systems (see Japan-U.S. Business Report No. 363, December 1999, p. 33).

Also throwing its hat into the e-commerce and intranet outsourcing ring, UNISYS CORP.'s unit has announced a comprehensive lineup of consulting, integration and support services. Marketed under the umbrella name of Internet Commerce Solutions, Unisys will divide its menu into B2B, business-to-consumer and intranet services. It plans to establish an iCommerce Business Center to develop customer solutions and provide support.

A six-way alliance is offering an e-commerce service based on the ASP (application service provider) model. The group pairs the subsidiaries of COMPAQ COMPUTER CORP., CYBERCASH, INC. and MICROSOFT CORP. with CSK ELECTRONICS CORP., FRONTLINE.JP INC. and SITE DESIGN CO., LTD. Their One Week Commerce package is claimed to be quicker, easier and cheaper than previous e- commerce alternatives because clients do not need new software or hardware. Customers simply access e-commerce servers and Web-site tools via the Internet to design, install and operate their on-line business presence. Besides serving as the ASP, CSK NETWORK SYSTEMS CORP. will provide customer support and market the service. Its goal is to sign 500 contracts worth $4.9 million the first year. After three years, CSK Network Systems believes that it can have 1,000 sites in operation and revenues of $29.1 million.

Several transpacific partnerships are competing in the red-hot market for outsourced B2B electronic collaboration. For example, BRICSNET N.V. and UNISYS CORP.'s subsidiary will offer a Japanese-language version of the Portsmouth, New Hampshire firm's ProjectCenter extranet service for the building industry. Unisys representatives expect ProjectCenter to get a warm welcome, given its proven track record of helping contractors complete jobs faster, cheaper and more efficiently. Marketing will begin in April 2000. Unisys will charge roughly $100 a month for each PC linked to a specific ProjectCenter Web site. Bricsnet and Unisys likely will work next on localizing other components of, a vertical portal for the building industry.


At the same time, CUBUS CORP. and BEING CO., LTD. of Mie prefecture have rolled out the San Francisco firm's Web-based e-business collaboration solutions for the construction industry. Cubus' software unifies many time-consuming communications processes, including phone, facsimile and e-mail, into an Internet-based collaboration environment where project data and documents can be shared, codeveloped, marked up and annotated and projects can be tracked from start to finish. Being officials see immediate application for the Cubus package in handling CALS (continuous acquisition and life-cycle support) duties.

Another contender in this space is MATRIXONE, INC. with its eMatrix platform. The Chelmsford, Massachusetts firm's Web application server exchanges and integrates all types of information and processes, such as conceptual planning, product design, manufacturing, marketing and customer support. At the front end, it interfaces with existing and new applications that link the enterprise's employees, partners, suppliers and customers. At the back end, it works with enterprise resource planning, supply chain management, product data management, customer relations and other applications to create a seamless corporate IT environment. Initially, MatrixOne's subsidiary will promote eMatrix as a PDM solution.

CRITICAL PATH, INC. is partnering with MI-TSUI & CO., LTD. and NIPPON TELEGRAPH AND TELEPHONE CORP. to establish a joint venture to promote its outsourced B2B Internet messaging solutions to customers in the Asian Pacific region. The unnamed company will focus on integrating services for wireless handheld devices with corporate e-mail infrastructures. Mitsui, which will have a 35 percent stake in the venture, will develop client contacts, while 25 percent owner NTT will provide technical support and manage the hardware and software. San Francisco-headquartered Critical Path, which already has a marketing pact with Mitsui (see Japan-U.S. Business Report No. 360, September 1999, p. 24), will own the remaining 40 percent. However, NEC CORP. is expected to join the venture, making it a potent challenger to market leader FUJI-TSU, LTD.

To further boost its secure Internet Protocol messaging system, TUMBLEWEED COMMUNICATIONS CORP.'s recently formed subsidiary (see Japan-U.S. Business Report No. 363, December 1999, p. 29) added TOYO INFORMATION SYSTEMS CO., LTD., HEWLETT-PACKARD JAPAN LTD. and TOKYO MATSUSHITA COMPUTER CORP. to its list of marketing partners. Toyo Information Systems will offer the Redwood City, California firm's Integrated Messaging Exchange service on an outsourced basis as well as add the package to its menu of integration services. HP Japan and Tokyo Matsushita Computer will act as IME resellers, furthering Tumbleweed's goal of making its electronic document system a de facto standard in Japan.

ORACLE CORP.'s operation will move into the ASP market sometime in the first quarter of 2000, offering the use of its enterprise resource planning package, Oracle Applications, via the Internet. Oracle touts the lower cost of ownership of Oracle Applications delivered via its ASP service. This channel should put the complex software solution, which requires significant hardware resources to run, within the financial reach of smaller companies.

AVATERRA.COM, INC. has signed a cooperation agreement with NTT SOFTWARE CORP. to identify, design, develop and market advanced interpersonal communications software for the Internet. The Santa Clara, California-based business specializes in commercializing technologies that enable Web-based, one-to-one interaction and the creation of portable personal Internet identities. will contribute ideas and leads on cutting-edge Internet technologies to NTT Software, which will be free to develop them for markets worldwide. In turn, NTT Software will provide development resources and marketing in Asia for's existing virtual communities and future interactive Internet applications, targeting both business and consumer markets.

With the help of marketing partners MEDIA VISION INC. and SRINET, INC. (see Japan- U.S. Business Report No. 355, April 1999, p. 26), KISS SOFTWARE CORP. has launched sales of an Internet-connection optimization suite. Through a nontechnical, five-step question-and-response process, the Tustin, California company's Modem Wizard 4.5 lets users make the best use of whichever kind of Internet connection they have. It also helps network clients reestablish their connections in the event of a system crash. The suite includes as well two utilities: Speed Surfer Internet Toolbox, which boosts Web browser performance by tracking Internet-use patterns and caching favorite sites and pages, and ShortCuts 2.0, which lets users link favorite Web sites, documents or programs to the function keys on their keyboards. Kiss Software is a wholly owned subsidiary of ESYNCH CORP.

HEWLETT-PACKARD JAPAN LTD. has tied up with NTT COMMUNICATIONWARE CORP. to develop and market high-performance software for information terminals based on Chai, HEWLETT-PACK-ARD CO.'s Java-workalike language. The companies are touting Chai's quick response times (see Japan-U.S. Business Report No. 362, November 1999, p. 29) in pitching the software for use in embedded and handheld devices.

IBM JAPAN LTD. has completed development and construction of a membership Internet system for RANDNETDD CO., LTD. and begun operating and maintaining the system for its client. RandnetDD, an equally owned venture between NINTENDO CO., LTD. and RECRUIT COSMOS CO., LTD., focuses on the community of Nintendo video game console users, offering them a virtual meeting place, on-line multiplayer games and new title information. IBM Japan is touting RandnetDD's system as a showcase for its e-busi-ness software tools, integration skills and outsourcing services. It points in particular to the site's content development, Web-based applications and comprehensive security system.

With computer graphics for video games becoming more sophisticated and realistic, SILICON GRAPHICS, INC.'s subsidiary recently spun off its entertainment division into a freestanding unit to better pursue this business. SGI originally set up the entertainment unit to develop animation and graphics for Hollywood motion pictures but closed it because of poor performance. Thanks to the insatiable demand of Japan's video gaming industry, the rechristened SILICON STUDIO LTD. not only was able to prosper but now plans to pursue new markets, such as digital content for the Web. Employees own more than 40 percent of the company; SGI's subsidiary has a 19 percent stake. Other investors include CSK CORP., a SONY COMPUTER, INC. affiliate and SUMISHO ELECTRONICS CO., LTD. Silicon Studio is projecting revenues of $29.1 million in 2000. SGI's computer- aided design and computer graphics divisions remain part of the former parent.

APPLE COMPUTER, INC.'s operation will begin offering support to its local developer and user communities via the Web. For $2,900 a year, subscribers to the service will get unlimited e-mail support for Apple's software products. Apple expects its first customers to be graphics and multimedia professionals who use its QuickTime audio/visual software and Final Cut Pro video editing package.


On-line shoppers and merchants worried about the security of Internet-based payments may be attracted to the localized version of MICROSOFT CORP.'s Passport service. Users provide Passport with their personal and credit-card information via a secure Web site and, in return, are issued a digital identification number. Then, when they are ready to pay on-line for goods, they simply enter their Passport ID and the service fills in name, address, shipping and payment data from its encrypted data base. Passport is free to both users and merchants, although the latter must agree to adopt a minimum set of privacy rules. Microsoft's subsidiary hopes that 1 million cybershoppers will join the first year as well as 50 on-line merchants.

The recent spate of hacker attacks on Japanese Web sites and malicious e-mail virus epidemics has created a ready audience for RSA SECURITY INC.'s new Internet security- oriented portal. The Net Security site, which is free of charge to users since it is supported by sponsors and advertising, presents in-depth information on all aspects of network, Internet and personal computer security. RSA Security's subsidiary provides the expert security content, with Tokyo's VAGABOND CO., LTD. handling content production and a third company, also Tokyo-based, operating the portal. Such companies as FORVAL CREATIVE, INC., ICSA, INC.'s subsidiary (see Japan-U.S. Business Report No. 356, May 1999, p. 23) and TREND MICRO, INC. are promoting the portal. Net Security was scheduled to be fully operational in January 2000.

Also responding to the recent surge in malicious Internet incidents, NETWORK ASSOCIATES, INC.'s marketing unit released an integrated package of network protection programs. NetTools Secure includes PGP data encryption, Gauntlet firewall and PKI (public key infrastructure) access-control modules. It also incorporates a full suite of antivirus programs, including VirusScan for desktop computers, Netshield for servers, Groupshield for networks and Webshield for Internet gateways. .....The subsidiary of rival SYMANTEC CORP. released an updated version of the competing Norton AntiVirus Enterprise Solution, better known as NAVEX, to counter the latest threats. Among other features, the program includes more business-oriented features. For instance, NAVEX sports easier enterprise-level control and administration modules as well as software that extends the antivirus shield to remote users. A license for 25 to 49 machines starts as low as $95.

Adding a physical layer of security to its digital certificate system, RSA SECURITY INC.'s unit is offering its SecurID Smartcard system. The card, which contains a processor and a nonvolatile memory chip, holds a user's personal data as well as digital certificate. When used with an appropriate card reader, it can encrypt and secure electronic documents and transmissions. RSA Security claims that its system is more secure than competing alternatives because the personal and certificate information do not reside on a vulnerable PC, as is usually the case. The cards cost $75 each and are impossible to reproduce, according to the Bedford, Massachusetts firm.

INTERNET DYNAMICS, INC. is offering businesses its intranet access-control software through distributor ASGENT, INC. InterConclave v2.1 resides on a single Windows NT server, which cuts deployment costs and time, yet it can handle access requests from thousands of clients. The Westlake Village, California firm's system also applies administrator-set rules to each request, ensuring that users get only the data they should. With InterConclave prices starting at $5,100, Asgent hopes to sell 200 systems the first year.

In an industry first, INTEGRATED SYSTEMS TECHNOLOGIES, INC. will bundle Orlando, Florida-based GLOBAL TECHNOLOGY ASSOCIATES, INC.'s GNAT Box 3.0 firewall software with an insurance policy from TOKIO MARINE & FIRE INSURANCE CO., LTD. that protects against losses if hackers manage to penetrate a client's servers and destroy data. Each package is tailored to the size and the needs of a corporation's network. For example, an annual premium of $5,800 will cover hacker damages of up to $485,400; another $100 a month will take care of the repair costs. Tokyo's Integrated Systems is forecasting sales of 500 packages in 2000.

For those companies seeking another layer of protection against hackers, TEIJIN SYSTEMS TECHNOLOGY LTD. is offering a high-performance operating system from ARGUS SYSTEMS GROUP, INC. that is built from the ground up with security in mind. The Savoy, Illinois firm's PitBull OS is designed to protect data and programs from intrusions in network and Internet computing environments. It runs on the Solaris operating system, which is common in the Internet server community. TST also is marketing and supporting Argus Systems' PitBull.comPack (formerly known as Gibraltar) suite, which provides end-to-end security for on-line transactions and e-commerce. The distributor expects sales of the two packages to hit $4.9 million the first year.

MICROSOFT CORP. announced the Japanese-lan-guage version of its next-generation network operating system, Windows 2000 Server. The Redmond, Washington software giant incorporated many new features aimed at business users' needs as well as stability, speed and other enhancements to the new edition. It will be available in late February 2000.

As for the Linux open-source operating system, the subsidiary of market leader RED HAT, INC. drafted NEC CORP. to offer users support for the Japanese version of Red Hat's version of Linux. NEC will open an in-house Linux technical support center for its own divisions and affiliates. It also will work with the Research Triangle Park, North Carolina company to ensure that its Linux OS runs smoothly on NEC computers. .....In a related move, RED HAT, INC. released through its marketing unit a Linux driver for the SCSI controller chip found in many NEC CORP. machines. That part is the AIC-7899 from ADAPTEC, INC. of Milpitas, California. The driver presumably will help Red Hat Linux gain more ground in the corporate server market, where the high-speed SCSI data transfer protocol is firmly entrenched.

In an additional sign that NEC CORP. is serious about becoming a top Linux provider in Japan, it inked a service and support agreement with another developer of the open- source OS, TURBOLINUX, INC. Personnel from Japan's top supplier of servers will provide frontline support for the San Francisco firm's version of the OS, with behind-the- scenes, in-depth expertise offered by TurboLinux staff. The two companies also agreed to cooperate on marketing and promoting TurboLinux in Japan and Asia by touting its CPU clustering features, which are unique in the Linux community.

Separately, TURBOLINUX, INC.'s subsidiary released two key packages based on its version of the OS. TurboLinux Server 6.0 hones the software's clustering abilities and simplifies installation and setup in complex business computing environments. At the same time, the TurboLinux marketing unit brought out MAGIC SOFTWARE ENTERPRISES INC.'s application development environment for Linux in cooperation with the Irvine, California company's subsidiary. dbMagic Enterprise Edition v8.2 is optimized for client- server and Internet programs, especially e-commerce (see Japan-U.S. Business Report No. 362, November 1999, p. 30).


DARTCOM, INC. and BUNKA ORIENT CORP. formed an alliance to promote and support the Syracuse, New York company's PowerTCP Internet application development tools. Bunka Orient, a market leader in the component software segment in Japan, is localizing PowerTCP, which turns ordinary applications into Web-friendly ones by brokering communications with the Internet. It will sell PowerTCP under the iNet name, bundling it with other utilities and support for the Windows (iNetWinsock), Internet messaging (iNetMail) and financial services (iNetTransfer) markets.

To help companies develop, produce and implement bug-free software, REASONING, INC. and partner TOSHIBA ENGINEERING CORP. are offering a software quality- assurance service built around the Mountain View, California firm's programs. Inspector Plus for Quality Assurance uses a five-step methodology: preliminary source-code inspection, technical review, final inspection (including automated source-code checking and analysis of defects), final report to the customer and periodic reinspection. Reasoning tied up with TEC in August 1998 to resell and support its Year 2000 compliance testing suite.

The latest addition to LOTUS DEVELOPMENT CORP.'s products that deepen the integration between its Domino/Notes groupware and other enterprise applications is Lotus Enterprise Solutions Builder r3.0, a development and run-time package. ESB Developer uses LotusScript to build and debug logic to integrate data from other programs with Domino-based applications. ESB Runtime functions either on a Domino server or a dedicated server. Lotus is touting the software's ability to create sophisticated, interactive links between Domino and other programs and its ability to handle the high volume of transactions in demanding corporate e-commerce environments.

Also focused on integrating legacy data and applications for e-business is TSI INTERNATIONAL SOFTWARE LTD.'s Mercator middleware. Now available in a fully localized edition with capabilities added for the Japanese market, Mercator boasts an easy- to-use graphical interface, broad conversion algorithms and snappy performance. The Wilton, Connecticut firm's marketing partners — MITSUI & CO., LTD., MITSUI KNOWLEDGE INDUSTRY CO., LTD., TOYO ENGINEERING CORP. and UNISYS CORP.'s subsidiary — have launched promotion campaigns to maintain the momentum of recent contract wins. These include deals with MITSUI TRUST & BANKING CO., LTD., NIPPON TELEGRAPH AND TELEPHONE CORP., NOMURA RESEARCH INSTITUTE, LTD. (see Japan-U.S. Business Report No. 358, July 1999, p. 29), SAKURA BANK, LTD., SEIKO EPSON CORP. and SONY CORP.

Admitting that enterprise IT departments will adopt the rival Windows 2000 framework to run their networks — and, therefore, its Active Directory service — NOVELL, INC.'s subsidiary released corporate and e-commerce editions of Novell Directory Services that work with Microsoft's network operating system. NDS eDirectory is a stand-alone, cross- platform LDAP directory service tailored for the special demands of e-com-merce. NDS Corporate Edition offers single-point management of user accounts, profiles, access policies, preferences and security credentials in a heterogeneous hardware/software environment.

VERITAS SOFTWARE CORP. and NEC CORP. are broadening their relationship. The big Japanese server manufacturer will bundle the Mountain View, California company's Backup Exec with its entry-level Express5800 server and NetBackup with its high-end Express5800 backup server for enterprise data protection in Windows NT environments. NEC now sells and supports VERITAS' full software lineup, including File System and Volume Manager for its Unix systems (UP4800/EWS4800 servers).

In early February 2000, VISIO CORP.'s local unit will release a high-end version of the Visio 2000 information technology planning package. Visio 2000 Professional Edition, which lists for $800, has new tools, a new drawing engine and a new model-based approach to IT diagraming. The interface also has been streamlined, and toolbars have been made customizable; support for larger drawings is another change. Together, Visio 2000 Professional makes quick and simple work of describing even the most complex IT computing environment, easing IT administrators' tasks.

The marketing subsidiary of Houston's BMC SOFTWARE, INC. and FUJITSU, LTD. are planning to cooperate on automated management solutions for enterprise computing systems. Their main goal is to integrate BMC's PATROL application service management platform (see Japan-U.S. Business Report No. 362, November 1999, p. 30) with Fujitsu's SystemWalker IT resource management system. The pair will target the large installed base of SAP R/3 users for their integrated product. They expect to sell it to 200 firms over the next three years.

To capitalize on the rapid growth of Linux-based servers, ORACLE CORP.'s subsidiary and OBIC BUSINESS CONSULTANTS CO., LTD. are working together to integrate the Linux version of the Oracle 8i data base with Obic's Bugyo 2000 enterprise resource planning package for small businesses. The partners will market the package separately by bundling it with a variety of other software and services for prices starting at $15,100.

In the computer-aided systems control market, ECHELON CORP. and partner DAI-DAN CO., LTD. of Osaka have designed a LonWorks solution for Singapore's Ministry of Education. The government agency will use the Palo Alto, California firm's software, which should be up and running in February 2000, to control the lighting and air conditioning at its offices. Dai-Dan also is a LonWorks user and gives clients tours of its facilities to showcase the package. .....Separately, ECHELON CORP.'s LonWorks will form the basis for NTT DATA CORP.'s new building-management outsourcing program. It will design, implement and maintain LonWorks installations for the construction and property-management industries. NTT Data plans to begin offering its new services in April 2000.

DENDRITE INTERNATIONAL, INC. of Morristown, New Jersey has landed a major new customer for its sales-force-automation solution, J-Force. The subsidiary of WARNER- LAMBERT CO.'s Parke-Davis division will deploy J-Force, which is designed specifically for the Japanese pharmaceutical industry, over the next six months to link in-house, field and home sales representatives with each other and their managers. Dentrite counts a number of pharmaceutical companies in Japan, both local and foreign, among its customers (see Japan-U.S. Business Report No. 356, May 1999, p. 28).

A new customer help-desk package from COMPUTER ASSOCIATES INTERNATIONAL, INC.'s marketing operation is aimed at the modest needs and budgets of small companies. The ServiceIT 4.32 Workgroup solution not only automates some aspects of handling telephone and e-mail inquiries from customers but also can analyze their content to make helpful suggestions. Moreover, at $9,700 for a three-seat license or $14,600 for a five-seat package, the CAI software is much less expensive to buy and maintain than competing products.


At the other end of the enterprise spectrum, MICROSOFT CORP. has received an order for a terabyte-class Windows NT 4.0/SQL Server 7.0 system to handle the huge customer relationship management needs of YASUDA FIRE & MARINE INSURANCE CO., LTD. Microsoft no doubt will showcase the installation, which should be finished in March 2000, in part because the combination of the Windows NT 4.0 Server operating system and the SQL Server relational data base management system can handle the heavy computing demands of Japan's second-largest property and casualty insurer. In addition, though, the system will cut operating and maintenance costs by about 40 percent a year compared to Yasuda Fire & Marine's current mainframe-based CRM setup.

Business intelligence solutions continue to evolve in step with the rapid growth of the Internet and intranets. NET PERCEPTIONS, INC.'s local arm (see Japan-U.S. Business Report No. 359, August 1999, p. 26), for example, is rolling out Japanese-language versions of its Minneapolis parent's business intelligence software for call centers and e- commerce. Net Perceptions for Call Centers 2.0 allows customer representatives to quickly develop appropriate answers and product offerings for callers. Expected to ship in February 2000, this product will cost $504,900 annually for a 300-seat license, including maintenance. Net Perceptions for E-Commerce 5.0 is designed to integrate with on-line shopping systems, allowing the analysis of users' buying habits and the creation of individualized Web pages. It will be available in April 2000. This package will go for $213,600 for a Web site with 100,000 customers or more.

Competitor BROADBASE SOFTWARE, INC., however, continues to land new customers for its business intelligence programs, including ADVANTEST CORP., CULTURE CONVENIENCE CLUB CO., LTD. and NTT LEASING CORP. All three use the Menlo Park, California firm's solutions to create profiles of individual customers that then shape responses to customer calls or generate individualized Web pages on the fly.

A business intelligence solution aimed more at company-to-company relations is available from the subsidiary of BUSINESS OBJECTS SA and new marketing partner SOFTBANK COMMERCE CORP. The two plan to open a Business Objects Solution Center in Tokyo to attract and support users of the San Jose, California firm's software. The Business Objects platform allows organizations to access, analyze and share information via the Internet, intranet or extranet.

Although computer accounting packages for small companies are a dime a dozen, a new system from COMSHARE INC. that integrates all aspects of planning, budgeting and reporting with powerful analysis tools is aimed at large and midsize corporations. The Ann Arbor, Michigan firm touts BudgetPLUS as a business intelligence accounting solution that can help companies reduce the time and the effort needed to complete each budget cycle. BEACON INFORMATION TECHNOLOGY INC. of Tokyo will sell and support BudgetPlus. Its goal is 10 contracts in the first year of marketing for the $58,300-and-up package.

TACTICIAN CORP. of Andover, Massachusetts is offering its self-named geographic information system solution through GIKEN SHOJI INTERNATIONAL CO., LTD. Tactician 2000 (known as Tactician 5.0 in the United States) features a faster map-drawing engine, an easier interactive mapping interface for the Internet, in-depth analysis tools and the ability to include a broad range of data types in its maps and reports. With the goal of selling 1,000 systems the first year, Nagoya-based GSI will target retailers and restaurant chains by promoting the software's ability to select store locations and perform marketing analyses. The basic software engine costs about $4,900.

"WorkSmart Technology" built into INTERGRAPH CORP.'s latest version of its two-dimensional precision design and diagraming program puts "intelligence" into the point of the program's cursor, helping designers to work more efficiently and productively. Drawing symbols can be imbued with properties, behaviors and actions, just as objects and symbols can be linked automatically with SmartConnectors. SmartLabels and SmartDimensions round out the tool palette of SmartSketch 3.0, allowing all design changes to be made easily and to be automatically reflected throughout the project. Intergraph's subsidiary hopes to sell 20,000 copies of the $950 SmartSketch 3.0 package the first year.

AUTODESK, INC. has made three additions to its Japanese line of products. Autodesk CAD Overlay 2000 lets AutoCAD 2000 users combine information-rich imagery with their intelligent vector-based drawings. The San Rafael, California firm thinks that the combination of images and drawings will improve the power and the productivity of drawings in real estate development, architecture, mechanical design and geographic information systems. Autodesk's subsidiary sees sales of the $2,400 Autodesk CAD Overlay 2000 reaching 3,000 units a year. .....AUTODESK, INC.'s Data Exchange 2000 allows AutoCAD 2000 drawings to be converted into two popular formats: Initial Graphics Exchange Specification, which is used by the U.S. govern-ment, and the International Standards Organization's STEP. The package costs $95 per format. .....Lastly, AUTODESK, INC.'s marketing arm is developing a utility that converts AutoCAD 2000 files into the Ministry of Construction's SCADEC format. MOC wants to conduct its entire public-works bidding and management process electronically beginning in April 2001, making the conversion utility a must-have for the 40 percent of Japan's construction industry that uses Autodesk software. According to current plans, the Autodesk subsidiary will have the software ready by August 2000.

Following CADENCE DESIGN SYSTEMS, INC.'s July 1999 purchase of Portland, Oregon-based ORCAD, INC., the subsidiary of the world leader in electronic design automation tools has absorbed OrCAD's local staff and business. This operation has become Cadence Design's PCB Systems Division. By combining their individually strong positions in the market for PCB design software, the enlarged Cadence unit plans to target the critical Japanese market even more aggressively.

Also angling for a bigger share of Japan's EDA market, MAGMA DESIGN AUTOMATION, INC. has established a majority-owned subsidiary in Yokohama in cooperation with exclusive distributor SC HIGHTECH CORP. The new organization will offer better sales and technical support to users of the Cupertino, California firm's Blast Fusion physical design system, including FUJITSU, LTD. (see Japan-U.S. Business Report No. 363, December 1999, p. 35). Magma Design hopes to boost Blast Fusion orders to $9.7 million during its subsidiary's first year of business. The package costs $388,300, or about the same as competing products. However, Blast Fusion is said to cut chip design time from the usual year to just two or three months.

Following the same expansion path, DENALI SOFTWARE, INC. of Palo Alto, California opened an office in Tokyo. The new operation will begin direct sales and support for Denali's memory subsystem design automation packages, including the Memory Modeler simulation tool and the PureData verification program. Denali already has won a contract from FUJITSU, LTD. (see Japan-U.S. Business Report No. 359, August 1999, p. 32).


Staking its claim to a share of the next generation of wireless products, WIDCOMM, INC. of San Diego, California appointed the subsidiary of INTEGRATED SYSTEMS, INC. to promote and distribute its Bluetooth technology. Bluetooth promises to link cellular phones with a broad range of consumer electronic devices, such as digital cameras, GPS (global positioning system) receivers, smart appliances and intelligent industrial machines.

With an eye on more immediate market opportunities, CYBERTEL, INC. has struck a partnership agreement with CYBIRD CO., LTD., one of Japan's top ISPs, to offer universal messaging and communications services based on the Hazlet, New Jersey firm's know-how. CyberTel's solution is based on the Internet Protocol standard, enabling users to access, manage and respond to pager, voice mail, facsimile and e-mail messages from any device connected to an IP or PSTN (publicly switched telephone network) network. Cybird was to launch trials of the CyberTel service in January 2000, with full operations scheduled to begin by April 2000.

PUMA TECHNOLOGY, INC. is working hard to retain its leading position in the market for synchronization software for handheld devices. The San Jose, California company has forged a relationship with number-three cellular services provider IDO CORP. to integrate its Intellisync for EZaccesss with IDO's network. This technology will enable wireless access to information via next-generation browser-based handsets. Considering that Puma previously had signed up NTT MOBILE COMMUNICATIONS NETWORK, INC., the dominant player in Japan's cellular business (see Japan-U.S. Business Report No. 356, May 1999, p. 29), the IDO pact gives Puma substantial coverage in the world's largest cellular phone market. .....PUMA TECHNOLOGY, INC. has a good reason to be diligent. IBM JAPAN LTD. has just released a software solution that allows microcellular PHS units to exchange data automatically. The company says that the program can be used to distribute announcements or public bulletins transparently and for essentially no cost — as long as the PHS units are no more than 100 yards apart and the message is less than three minutes long. IBM Japan has created virtual bulletin boards for corporations and schools to demonstrate its latest technical breakthrough.

Also hoping to ride the wireless craze is SPYGLASS INC. The Naperville, Illinois company is the developer of Prism, a program that converts on the fly Internet content for display on the small screens of personal digital assistants, and of a system to support two- way interaction for digital television. To promote and support its technology, Spyglass upgraded its Tokyo office to a subsidiary. The new organization plans to boost staffing from seven people to 15 by September 2000, mainly to convert the company's products into Japanese. FUJITSU, LTD. already uses Prism (see Japan-U.S. Business Report No. 363, December 1999, p. 31). The subsidiary is targeting other big electronics makers. Spyglass now generates about 10 percent of its revenues in Japan. If its various strategies are successful, that ratio could reach roughly 40 percent in the year through September 2003.

Going up against SPYGLASS INC.'s interactive TV offering, OPENTV, INC. is pitching its iTV know-how to Japan's digital satellite and cable television operators. The Mountain View, California company, which has financial backing from some big American Internet, broadcast and broadband companies, has opened an office in Tokyo to lead the effort. The OpenTV set-top box software already has been licensed to four name Japanese companies: MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., NEC CORP., SONY CORP. and TOSHIBA CORP.

An exchange rate of ¥103=$1.00 was used in this report.

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Japanese manufacturers of fiber-optic cables have a new, in-country source of state-of-the- art fibers. KDD FIBERLABS of Kamifukuoka, Saitama prefecture brings together THORLABS, INC. and the R&D laboratories of international communications carrier KDD CORP. The joint venture, in which the Newton, New Jersey company evidently is a minority investor, will specialize in the supply of exotic glass, rare-earth, doped optical-fiber products. Among the first ones to be produced are fluoride and tellurite fibers, including fluoride fiber bundles, as well as various ASE (amplified spontaneous emission) White Light Test Source models. KDD FiberLabs will market these products in Japan. It also will serve as the exclusive distributor of other Thorlabs products. Outside of Japan, Thorlabs will be the sole marketer of KDD FiberLabs' product line. The U.S. company and its Japanese partner have worked together since 1998.

Within the space of five months, at least six American firms have unveiled plans to build Internet data centers in Japan (see Japan-U.S. Business Report No. 363, December 1999, p. 36). The latest addition to the list is DIGITAL ISLAND, INC. The San Francisco company's ultrasecure facility will be built in Tokyo. Slated to be operational by April 2000, it will be maintained around-the-clock by on-site personnel. Like Digital Island's five existing regional data centers, the Tokyo location will have backup and disaster-recovery systems to ensure the safety and the availability of customers' applications and data. In advance of this move, Digital Island formed a subsidiary in the capital to provide global content delivery services, applications hosting and intelligent network services to Japanese corporations under the e-Network Services banner.

LUCENT TECHNOLOGIES INC. has demonstrated time and again in recent years that it is prepared to do whatever is necessary to become a heavyweight in the huge Japanese market for carrier-class equipment. That message has received reinforcement in the form of the announcement that the company's Bell Laboratories was opening its third R&D facility in Japan. Located in Yokohama, the center will strengthen Lucent's local wireless communications systems development capability, both on the hardware and the software side. Its initial focus will be wideband CDMA technology for the third-generation wireless communications systems that NTT MOBILE COMMUNICATIONS NETWORK, INC. could deploy as early as 2001. In time, though, the center will pursue R&D on other wireless communications technologies. For the last two years, Bell Labs has honed its W- CDMA expertise at the Yokosuka Research Park in Kanagawa prefecture, not far from Yokohama. In December 1998, Lucent's R&D arm also opened a facility in Makuhari, Chiba prefecture to explore advances in passive optical networking equipment.

Under a contract worth approximately $3.2 million, GLOBECOMM SYSTEMS INC. will design, build, install and support a satellite earth station for NTT COMMUNICATIONS CORP. The facility, which will be located on Okinawa, will be equipped with an ATM switch and have voice capabilities and direct Internet connectivity via satellite to the U.S. Internet backbone in Chatsworth, California. Globecomm Systems' NETSAT EXPRESS, INC. subsidiary will provide this link, which will enable NTT Communications, the domestic and international long-distance unit of NIPPON TELEGRAPH AND TELEPHONE CORP., to offer competitively priced high-bandwidth Internet access services to subscribers in this region of Japan. Installation of the earth station is scheduled to be finished in the first quarter of 2000.

The Gigabit Ethernet network solution offered by CABLETRON SYSTEMS INC. received its second endorsement in as many months from a health-care institution in Japan (see Japan-U.S. Business Report No. 363, December 1999, p. 37). Saiseikai Kumamoto Hospital in the prefectural capital installed a system featuring the Rochester, New Hampshire maker's SmartSwitch Router technology to manage and transmit high-volume data files, including X-rays, scans, images and patient records. The Cabletron infrastructure also enables the hospital to automate other parts of its operation, such as the accounting system. Equally important, the state-of-the-art communications network positions the facility to move into the telemedicine field in the future.

CISCO SYSTEMS, INC.'s subsidiary is partnering with SUMITOMO ELECTRIC INDUSTRIES, LTD. on optical communications network infrastructure to meet the exponential increase in demand for Internet bandwidth. Their solution combines the Cisco 12000 Gigabit Switch Router with SEI's capacity-expanding wavelength-division multiplexing technology. The GSR equipment takes data traffic from traditional voice, ATM, frame-relay, cable, digital subscriber line and dial-up platforms and transmits this information at gigabit speeds across the optical IP network. Cisco Systems and SEI predict that their marketing alliance will produce combined revenues of $77.7 million in 2000 and as much as $339.8 million in 2002.

Signaling a major push into the Japanese market, broadband communications equipment supplier POLYCOM, INC. signed HITACHI CABLE, LTD. to sell its voice conferencing, video communications and Web-conferencing products. At the heart of the San Jose, California manufacturer's line is the ViewStation series of video communications products with their Web management, video-over-IP and Ethernet connectivity capabilities. Hitachi Cable has formed a business unit dedicated to the marketing of Polycom's devices and committed to distributing no other company's conferencing products.

The third generation of COBALT NETWORKS, INC.'s Japan-customized Internet and Web-hosting server appliances is available through the Mountain View, California company's Tokyo subsidiary and its multiple distributors. The RaQ 3J hardware/software combination, which runs the Linux operating system, provides a full suite of Internet services, including Web publishing, e-mail and file transfer, along with remote administration, thereby enabling ISPs, developers and systems integrators to build solutions. Cobalt's main sales pitch for the RaQ 3J, like its predecessors, is that this server appliance allows organizations to establish an on-line presence more cost-effectively and easily than using Unix or Windows NT systems.

ACT NETWORKS, INC. is projecting Japan sales of $10 million in 2000 for its NetPerformer family of integrated network access devices for voice-over-IP networks. SUMITOMO CORP. has the job of making the Calabasas, California manufacturer's forecast a reality. The trader will market the NetPerformer line through its various distribution channels, with a NEC CORP. subsidiary providing installation and technical support services.

Two U.S. suppliers of Internet security appliances have expanded their product lines to reach smaller end-users. SONICWALL, INC. (formerly Sonic Systems, Inc.) released the SonicWALL SOHO. Like other devices in the Sunnyvale, California company's line, this product protects the corporate LAN (local area network) from Internet hackers and vandals, prevents denial-of-service attacks, filters content and provides IP address and Web browser management. The SonicWALL SOHO, though, is intended for businesses with anywhere from a few Internet users to several hundred since, depending on the model, it can support 10 nodes or 50 nodes. SonicWALL tied up with SUMITOMO METAL SYSTEMS DEVELOPMENT CO., LTD. to distribute this product. Other companies market the rest of SonicWALL's affordable, easy-to-use and robust Internet security appliances (see Japan-U.S. Business Report No. 355, April 1999, p. 15).

For its part, NETSCREEN TECHNOLOGIES, INC. introduced through marketing partner HITACHI SEIBU SOFTWARE, LTD. an Internet security appliance for remote offices and telecommuters. The NetScreen-5 integrates firewall, virtual private networking and traffic- shaping functionalities in configurations designed for 10 users or 25 users. Given the movement of small businesses in Japan into the Internet age, Hitachi Seibu Software calculates that it can sell 3,000 NetScreen-5s a year. The device is expected to go for under $3,900.

With demand expanding in Japan for wireless LAN products, particularly for all the mobile computers sold there, the leader in this field, Sunnyvale, California-based PROXIM, INC., opened an office in Tokyo. It will provide sales and technical support for the company's complete lineup, including the popular RangeLAN2, the RangeLAN802 and Symphony (see Japan-U.S. Business Report No. 361, October 1999, p. 35). The office also will be tasked with building up Proxim's OEM customer base and developing new sales channels.

Indicative of the market in Japan for wireless LAN products is the estimate by NCR CORP.'s subsidiary that it can sell annually 100,000 of LUCENT TECHNOLOGIES INC.'s new WaveLAN Turbo 11 Mb systems. This addition to the WaveLAN line not only delivers performance compliant with the latest IEEE 802.11 high-rate standard, but also provides improved coverage and range. In addition, the manufacturer says, it consumes less power than competing models. For mobile computers, the WaveLAN Turbo 11Mb is implemented through a $565 PC Card. An antenna costs $195. The WavePOINT-II access point that creates the enterprisewide wireless LAN lists for $2,200.

XM SATELLITE RADIO INC. has enlisted a fifth Japanese company, CLARION CO., LTD., to develop, make and market radios capable of receiving its new brand of radio broadcasting service. As soon as early 2001, the Washington, D.C.-based company will deliver via satellite up to 100 channels of digital-quality music, news, sports, talk and children's programming directly to vehicle, home and portable radios anywhere across the United States for a monthly charge of $9.95. The other Japanese companies working with XM Satellite Radio are ALPINE ELECTRONICS, INC., MITSUBISHI ELECTRIC CORP., PIONEER CORP. and SHARP CORP.

An exchange rate of ¥103=$1.00 was used in this report.

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The company that commercialized the thermal-regulating technology behind the space gloves developed for NASA is moving into the Japanese market. OUTLAST TECHNOLOGIES, INC. gave ITOCHU CORP. exclusive rights to import and distribute its OUTLAST fiber, fabric and foam for hats, jackets, gloves and the like. Products made from the Boulder, Colorado company's textiles use microcapsules filled with phase-change materials to store the warmth created by the wearer. This warmth is released back to the person when he or she needs it. Conventional thermal garments rely on trapped air for warmth, but it can be lost when the wearer becomes too hot and opens a vent. Itochu expects sales of OUTLAST materials to total $1.9 million in the first year of availability.

The first clothing items using fabrics made with CORTERRA fibers have arrived in stores in Japan. ASAHI CHEMICAL INDUSTRY CO., LTD. developed the women's long-sleeve crewneck and button-down blouses. The big textile manufacturer produced the fabrics from CORTERRA fibers it turned out using production technology licensed from SHELL CHEMICAL CO. CORTERRA fibers, the Houston company says, are well-suited for fabrics used to make such clothing as casualwear, swimwear, activewear and innerwear since they combine a soft, silky texture and drape with excellent stretch and recovery properties. CORTERRA is the trade name for the polytrimethylene terephthalate polymer.

From the end of January 2000, EDDIE BAUER INC.'s subsidiary will market a new brand of casual clothing for men in their 20s. The EB Sports line includes T-shirts for $28 and sweat pants at $57 a pair.

An exchange rate of ¥103=$1.00 was used in this report.

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One way or the other, GENERAL MOTORS CORP. is determined to claim 10 percent of automotive sales in Asia in 2004. Increasingly, the "other" means to this goal involves capital and technical alliances with Japan's stumbling second-tier vehicle builders. In late 1998, the world's top car and truck manufacturer upped its stake in SUZUKI MOTOR CORP. to 10 percent as part of a plan for the minivehicle maker to help it design and develop small, affordable and rugged vehicles for developing markets in Asia and elsewhere. Just months later (see Japan-U.S. Business Report No. 352, January 1999, p. 29), GM decided to tap more thoroughly the truck and diesel engine expertise of even longer-time affiliate ISUZU MOTORS LTD. That move was accompanied by an increase in the multinational's ownership to 49 percent. Now, GM has agreed to acquire a 20 percent interest in FUJI HEAVY INDUSTRIES, LTD. at a cost of roughly $1.4 billion. This capital infusion, to be accomplished through the purchase of new shares, is scheduled to be completed in early March 2000. It will make GM the top shareholder in the producer of the Subaru nameplate without requiring Fuji Heavy Industries, which had been actively searching for a foreign partner since last summer, to cede any management independence, top executives of the two companies say. On the technical side, the tie-up with GM could help Fuji Heavy Industries with environment protection-related technologies and in other ways that still are under discussion. However, the initial thrust of the alliance will be the design and production of small and midsize sport-utility vehicles and what the partners call crossover vehicles. Here, GM will be able to draw on FHI's world-recognized strengths in all-wheel-drive technology and continuously variable transmissions, which allow vehicles to accelerate smoothly and attain greater fuel efficiency. Among other possibilities for collaboration that project teams from the two companies are exploring is having Fuji Heavy Industries build vehicles for sale with a GM badge or selling GM products in Japan through its affiliate's dealer network.

Now that it owns the Jaguar and Volvo nameplates, FORD MOTOR CO. plans to consolidate in a new organization the administrative functions of its various group companies in Japan, including accounting, as well as such other operations as predelivery inspections. Such an integration is designed to cut costs by eliminating overlapping positions. All of the marketing activities of the various Ford-owned brands will remain independent of each other, however.

GENTEX CORP., the pioneer of the electrochromic automatic-dimming vehicle rearview mirror and now the dominant supplier of this technology to automotive makers around the world, is making a push into the Japanese market. The Zeeland, Michigan manufacturer has forged a broad alliance with MARUKAMI CORP. on electrochromic mirrors. Interestingly, the Shizuoka prefecture company is a Gentex competitor, having developed its own ECM technology. Under the agreement, however, Marukami will end production of its product and start marketing Gentex's Night Vision Safety mirrors. The two also will collaborate on product development. Comanufacturing is a possibility in the the future.

An exchange rate of ¥103=$1.00 was used in this report.

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Just a year after launching production of chemical mechanical planarization slurries in Geino, Mie prefecture, the Microelectronics Materials Division of CABOT CORP. announced a major expansion of the facility. It will boost capacity 150 percent and increase the production work force by 200 percent. The extra capacity will go onstream early in 2000. The plant serves semiconductor producers not only in Japan but elsewhere in the Asian Pacific. Cabot MMD, which is based in Aurora, Illinois, is the leading global supplier of CMP slurries for polishing oxide, tungsten, copper and aluminum used in various semiconductor manufacturing processes.

PROCTER & GAMBLE CO.'s subsidiary and WACOAL CORP., Japan's top lingerie manufacturer, have tied up on sanitary napkins — a market where the duo thinks that an innovative product can steal share from other competitors. Their candidate is the Whisper W System, which combines P&G's thin but absorbent Whisper Fresh Slim sanitary napkins with underpants made on an OEM basis by Wacoal. That product has a unique construction that keeps the napkin close to the body, thereby helping to prevent leaks without using a waterproof material. P&G will begin marketing the Whisper W System in March 2000 through its existing Whisper sales channels. Wacoal will provide marketing support. The partners are aiming for sales of 1 million Whisper W Systems in the first year.

For the first time, an ultrasonic toothbrush is available in Japan. The $175 Ultima is manufactured by SONEX INTERNATIONAL CORP. of Brewster, New York. TORAY IREEVE CORP. is distributing the product under an agreement with ASAHI IRIKA CO., LTD., which obtained marketing rights to the ultrasonic toothbrush in 1998. Toray Ireeve is projecting Ultima sales at 30,000 units the first year and 100,000 annually after three years.

DIGITAL DOMAIN, INC., an award-winning digital visual effects studio, has teamed up with RISE ENTERTAINMENT INC. of Kyoto to win projects from Japan's amusement industry. The Venice, California com-pany's agent is pitching its ride attractions to theme parks and the like, hoping to gain contracts from three such facilities a year. Before the tie-up with Rise Entertainment, Digital Domain had completed one project in Japan and received a contract for another.

Tokyo's DIGITAL AMUSE INC. has found a potential new use for computer graphics: digitizing the images of models, real and imaginary, for promoting products over the Internet, for instance. To move into this business, which it hopes to get off the ground in the spring of 2000, digital amuse tied up with ELITE MODELS INC., one of Manhattan's premier modeling agencies. The Japanese company initially will digitize the images of 30 Elite models. If the idea pans out, the digital amuse venture will save advertisers the often stiff cost of hiring real models.

The largest operator of golf facilities in the world is seeking acquisition opportunities in Japan, where property prices have fallen to more reasonable levels because of the economy's decade-long problems. AMERICAN GOLF CORP. runs more than 320 private, resort and public golf courses and practice centers in the United States and the United Kingdom. In Japan, the Santa Monica, California company reportedly hopes to take over anywhere from 30 to 50 golf courses within five to 10 years. The first of what could be three initial acquisitions is expected to be finalized by March 2000, which is the projected timing for AGC to open a subsidiary.

For nearly the last three years, organizations in Fukuoka have studied the feasibility of building a waste-to-energy facility using ENERGYANSWERS CORP.'s Processed Refuse Fuel technology. In the meantime, the municipal waste problem in Fukuoka and elsewhere in Japan has only worsened. Now, the Albany, New York firm, which bills itself as the resource recovery company, has licensed its PRF technology to NISHINIPPON ENVIRONMENT ENERGY CO., INC. Although all the details have not been worked out, within two to three years, the Fukuoka business could be operating a facility capable of combusting 400 tons of municipal solid waste a day in an environmentally benign way while, at the same time, recovering recyclable materials and generating energy.

The realignment of the international advertising industry is having effects in Japan. For instance, following the combination of BOZELL WORLDWIDE with New York City neighbor FCB WORLDWIDE, common parent TRUE NORTH COMMUNICATIONS, INC. of Chicago is integrating the subsidiaries of the two agencies. FCB Worldwide, which now ranks as the number-five global agency brand as well as the largest agency in the United States, is the surviving name. The combined company has a staff of about 50 and projected 1999 billings of $58.3 million. Its first order of business is to pump up sagging revenues. The operation will continue previous local affiliations — that of FCB Worldwide with TOKYU AGENCY CO., LTD. and Bozell Worldwide with DENTSU INC.

Ad agency SEARCH & SEARCH BATES YOMI-URI has been dissolved. It was formed in January 1997 by New York City's CORDIANT COMMUNICATIONS GROUP (31 percent), which included the Bates agency name, SEARCH & SEARCH (31 percent), then also part of Cordiant Communications, and YOMIKO ADVERTISING, INC. (38 percent). Search & Search no longer is under Cordiant Communications' umbrella, making continuation of the joint venture increasingly difficult. It will form a new relationship with Yomiko Advertising, while Cordiant Communications will restructure its dealings with the Tokyo ad agency.

New York City's TAYLOR RAFFERTY, a specialist in crossborder investor relations, plans to move into the Japanese market in the spring of 2000. Through a partnership with an unnamed domestic company, it will help Japanese corporate clients develop strong investment messages and assist them in identifying the most effective ways to deliver this information to market professionals.

Beginning in March 2000, the subsidiaries of NET-RATINGS, INC. and A.C. NIELSEN CO. will start compiling information on the Internet surfing habits of some 3,000 individuals. Internet media tracker and market researcher NetRatings originally had planned to launch this service on its own (see Japan-U.S. Business Report No. 361, October 1999, p. 36), but for reasons not disclosed, it decided to tie up with A.C. Nielsen, the world's largest market research firm. The new partners expect to expand their sample base to 10,000 on-line users at the end of 2000.

With merit-based salary calculations starting to take the place of the seniority-based payment system characteristic of big Japanese corporations, ARTHUR ANDERSEN LLP and CASIO COMPUTER CO., LTD. see a demand emerging for compensation-related consulting and software. Their pairing is a natural since Casio ranks first in the Japanese market for personnel administration software and Arthur Andersen is one of the world's top business consulting operations. The two firms hope to advise 10 companies in their first year of cooperation and to post revenues of $970,900 from this work.

An exchange rate of ¥103=$1.00 was used in this report.

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