No. 346, July 1998

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Japanese Companies in the United States

American Companies in Japan

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Japanese Companies in the United


The world's largest trader of ethylene dichloride, MITSUI & CO., LTD., will have its own U.S. source of supply in the early part of 2000. The trading company has formed a 49 percent/51 percent joint venture with the Vulcan Chemicals group of VULCAN MATERIALS CO. to expand that company's EDC capacity in Geismar, Louisiana to 270,000 tons a year after acquiring existing EDC production facilities. Mitsui will buy all the complex's EDC output. This product is a key raw material for the manufacture of vinyl and polyvinyl chloride. The partners also will build a second chlor-alkali plant at the Geismar site. It will be able to turn out approximately 210,000 tons of chlorine and 230,000 tons of caustic soda a year. Birmingham, Alabama-based Vulcan Chemicals will market all of the new facility's caustic soda. Most of the chlorine will be delivered by pipeline to nearby customers. They will return anhydrous hydrogen chloride for use as a feedstock in the expanded EDC facility. Construction work will begin this fall, with production expected to start in the first quarter of 2000. The joint venture is projecting sales of $150 million that year.

Japan's top manufacturer of nylon resins and compounds for the plastics industry and one of the world's leading independent compounders of thermoplastics and rubber have formed an equally owned company to serve major international compounded nylon products markets. Through the joint venture, UBE INDUSTRIES, LTD. and Cleveland-headquartered M.A. HANNA CO. will manufacture and sell nylon 6, nylon 6/6 and nylon 12 plastic compounds in North America, Europe and the People's Republic of China. The North American operation will be run by UBE-HANNA COMPOUNDING CO., LLC. Similar entities will be established in Europe and China. All three will compound Ube-manufactured nylon resins, tailoring the products to customers' requirements for strength and heat resistance. Nylon 6 and nylon 6/6 compounds will be marketed to Japanese manufacturers in North America and Europe, while the nylon 12 products will be targeted at a broader range of markets. The partners project annual sales of $15 million for the three joint ventures combined.

The second capacity expansion has been completed at FORTRON INDUSTRIES CO., a Wilmington, North Carolina manufacturer of polyphenylene sulfide polymer equally owned by KUREHA CHEMICAL INDUSTRY CO., LTD. and an affiliate of HOECHST CELANESE CORP. When the plant opened in 1994, it could make about 4,000 tons of Fortron PPS resins a year. Annual capacity was boosted to roughly 5,000 tons in 1996. The latest expansion, which cost approximately $8 million, lifted yearly capacity to 6,000 tons or so. Fortron PPS is a second-generation, linear PPS that is said to offer significant cost and performance benefits over conventional, branched PPS. It is known for its resistance to extremely high temperatures and virtually all solvents. Fortron Industries uses Kureha Chemical's proprietary PPS manufacturing technology and Hoechst Celanese's compounding expertise.

Capacity also is being increased at NISSEKI CHEMICAL TEXAS INC. The Pasadena, Texas company, operational since mid-1994, makes a super aromatic solvent used in carbonless paper and condenser insulator oil. Parent NIPPON PETROCHEMICALS CO., LTD. is spending about $3.6 million to install additional equipment to raise top annual output to 16,500 tons from 9,900 tons. Higher demand for SAS for insulating oil use from such customers as GENERAL ELECTRIC CO. and ABB INC. is said to be behind the move.

NIPPON ZEON CO., LTD. licensed its manufacturing technology for styrene-butadiene rubber to DOW CHEMICAL CO. The Midland, Michigan company will employ the process at a plant in Germany scheduled to be operational in mid-2000. As needed, Dow will supplement Nippon Zeon's own output of the high-technology synthetic rubber for tires and other applications. Used in tires, styrene-butadiene rubber lowers vehicle fuel consumption while yielding a product that is more durable. Nippon Zeon never before has licensed its styrene-butadiene rubber technology, but the company decided that the deal with Dow would allow it to supply customers in Europe without having to absorb the cost of setting up a production base there.

Two competitors in the container coatings market are now collaborators. The polymer chemical business of TOYO INK MANUFACTURING CO., LTD., which is strong in Japan and Southeast Asia in conventional interior/exterior coatings and inks for beverage, food and specialty cans, is working with the Dexter Packaging Coating unit of DEXTER CORP. to offer a complete range of coatings to canmakers. The Waukegan, Illinois-based American partner is a global supplier of coatings for beverage can interiors and closures and for food and specialty cans. It has manufacturing facilities in the United States, Latin America, Europe, Singapore and Japan. The tie-up will give customers around the world access to both companies' technology. The partners are projecting sales on the order of $285.7 million a year.

Production of vitamin E will start next year at EISAI CO., LTD.'s recently completed plant in Pasadena, Texas. The big pharmaceutical company spent more than $35 million to build and equip the highly automated facility, which has the capacity to make more than 1,600 tons of vitamin E a year. This output will replace supplies imported from Japan. Eisai recently opened an integrated research and development/manufacturing complex in Research Triangle Park, North Carolina (see Japan-U.S. Business Report No. 339, December 1997, p. 2). It plans to build a new drug development research park in Andover, Massachusetts, where it now has a drug discovery research operation and a pharmaceutical process development facility (see Japan-U.S. Business Report No. 340, January 1998, p. 2).

Just days after FUJISAWA PHARMACEUTICAL CO., LTD. sold the never-profitable generic drug business of its Deerfield, Illinois subsidiary to an affiliate of AMERICAN BIOSCIENCE, INC. (see Japan-U.S. Business Report No. 344, May 1998, p. 2), the major drug company bought $10 million worth of the Santa Monica, California firm's preferred stock. ABS is working on the development of cancer-fighting agents using a microencapsulation technology that reduces particles to the size of molecules. Fujisawa Pharmaceutical is interested in applying ABS's technology to the development of its own products. The two companies actually have a link that predates the sale of the generic drug business. Since last year, ABS has been working on new formulations of Fujisawa Pharmaceutical's Prograf immunosuppressant (see Japan- U.S. Business Report No. 341, February 1998, p. 2).

The Food and Drug Administration cleared ASTRA MERCK INC. to market Atacand (candesartan cilexetil) for once-a-day treatment of hypertension. The drug was discovered by TAKEDA CHEMICAL INDUSTRIES, LTD. and codeveloped as TCV-116 by Japan's top pharmaceutical company and Sweden's ASTRA AB. Astra Merck, a Wayne, Pennsylvania company equally owned by Astra and MERCK & CO., INC., has exclusive U.S. marketing rights to Atacand. It belongs to a group of antihypertensive medications known as angiotensin II receptor blockers, which are the first new class of antihypertensive agents in the United States in more than a decade.

A promising compound discovered by JAPAN TOBACCO INC. for the treatment of both the underlying cause of noninsulin-dependent diabetes mellitus (Type II diabetes) and the symptoms has been licensed to PHARMACIA & UPJOHN, INC. JTT-501 belongs to a novel class of products called insulin sensitizers. It is in Phase II development. P&U has the right to develop JTT-501, an oral therapy, and to market it worldwide outside of Japan and South Korea. The Kalamazoo, Michigan firm will make an initial payment of $6 million to JTI as well as milestone and royalty payments.

Comfortably swallow a tablet without water? That is the promise of WOWTAB, a quick- dissolving, without-water tablet technology patented by the Yamanouchi Shaklee Pharma Research Center in Palo Alto, California (see Japan-U.S. Business Report No. 339, December 1997, p. 2). The division of San Francisco's SHAKLEE CORP., itself owned by YAMANOUCHI PHARMACEUTICAL CO., LTD., licensed the drug delivery system to JOHNSON & JOHNSON-MERCK CONSUMER PRODUCTS CO. for use in the development and commercialization of an over-the-counter product. Like its affiliate, Yamanouchi Pharmaceutical plans to make development of drug delivery systems a key business strategy.

Japanese pharmaceutical manufacturers interested in conducting clinical trials and other tests abroad in an effort to accelerate the new drug development process will have another option later next year. In May 1999, SHIN NIPPON BIOMEDICAL LABORATORIES LTD. will build a $5 million laboratory in Seattle to perform animal testing and clinical trials on new drugs. The Kagoshima prefecture-based company hopes to work on 40 pending therapies in the first year, generating revenues of $5 million. The research center will have a staff of 28 initially, including 20 or so Americans. SNBL has done work in Japan for about 300 drug companies, including 10 American pharmaceutical houses.

An exchange rate of ¥140=$1.00 was used in this report.

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In another key endorsement of INTEL CORP.'s IA-64 architecture, FUJITSU, LTD. will build its next generation of high-performance servers around the 64-bit microprocessor known as Merced. This groundbreaking chip now is scheduled for commercial shipment in mid-2000. Fujitsu's development effort will be supported by a wide-ranging strategic alliance with the microprocessor king. The Japanese company says that its interconnect technology will allow 32 Merced chips to work together simultaneously on a single platform. Intel's original specifications for the processor put the maximum linkage at eight chips. Fujitsu's 64-bit servers will run an adapted version of SUN MICROSYSTEMS, INC.'s Unix-based Solaris operating system rather than Windows NT (see Japan-U.S. Business Report No. 344, May 1998, p. 6).

Also citing the reliability and the scalability of the Unix operating system over the Windows NT environment for demanding enterprise applications, TOSHIBA CORP. indicated that it, too, would use SUN MICROSYSTEMS, INC.'s Solaris for servers powered by INTEL CORP.'s 64-bit Merced processor. For their part, HITACHI, LTD. and NEC CORP. intend to pair HEWLETT-PACKARD CO.'s HP-UX operating system with the IA-64 architecture (see Japan-U.S. Business Report No. 345, June 1998, p. 18).

Is there room for two more competitors in the U.S. personal computer server market, where COMPAQ COMPUTER CORP., INTERNATIONAL BUSINESS MACHINES CORP., DELL COMPUTER CORP. and HEWLETT-PACKARD CO. control roughly three-fourths of the business? TOSHIBA CORP., the leader in the American market for notebook computers, and HI-TACHI, LTD., which sells both notebook and desktop computers, certainly think so, although NEC CORP. could tell them how hard it is to gain share. In any case, say the newcomers, they currently are at a disadvantage because they do not offer the complete line of products that corporate customers seek. Both Toshiba's Magnia PC servers and Hitachi's VisionBase PC servers run on high- end Pentium II processors. The two Toshiba models already on the market, the entry- level Magnia 3000 and the midrange Magnia 5000, are priced about 10 percent below comparable products from Compaq and IBM. Hitachi's entry-level, midrange and high- end VisionBase models will ship in the fall. They, too, are expected to be priced below the competition's, but the company also believes that such features as mainframe- class reliability and management tools also derived from mainframe technology will be strong selling points. Both companies market their products direct to big customers while also using distributors.

Production of digital video discs at PIONEER VIDEO MANUFACTURING, INC. in Carson, California is headed toward 1.5 million DVD-ROM (read-only memory) units a month by the end of the year as a result of new capacity already in operation and additional production lines scheduled to be in place soon. PIONEER ELECTRONIC CORP. is spending $10 million on the expansion and to add a custom DVD premastering studio capable of premastering more than 50 DVD titles each month. That addition allows Pioneer Video to do premastering, mastering, replication and packaging of DVDs under one roof. When all the work is done, the company will be one of the largest full-service DVD facilities in the United States.

An exchange rate of ¥140=$1.00 was used in this report.

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For a change, a Japanese company has made money on the sale of an American property acquired during the "bubble economy" years. NICHIEI CO., LTD. sold the Benjamin Franklin Plaza, a 19-story office building in downtown Portland, Oregon, to SPIEKER PROPERTIES, INC. of Menlo Park, California for $50 million. The Kawasaki, Kanagawa prefecture company paid $34 million for the building in September 1990.

An exchange rate of ¥140=$1.00 was used in this report.

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In a deal that adds both new product lines and production facilities in new countries, AVX CORP. acquired for $75 million the international passive components business of France's THOMSON-CSF S.A. Myrtle Beach, South Carolina-headquartered AVX, a major manufacturer of capacitors and other electronic components, is a KYOCERA CORP. subsidiary. Thomson Passive Components, as it was known, makes film capacitors, ferrites, high-energy and high-voltage power capacitors, ceramic capacitors, varistors and nonlinear resistors in Malaysia, Brazil and Taiwan as well as in France. Its 1997 sales were $135 million. Worldwide employment is about 2,200 people. TPC's U.S. operations are located in Chatsworth, California. AVX had revenues of close to $1.3 billion last year.

Two other players in the capacitor business, NEC CORP. and KEMET ELECTRONICS CORP., have teamed up to make and market conductive polymer tantalum capacitors. This technology offers ignition prevention, low ESR (equivalent series resistance) and high capacitance. These benefits, the partners believe, will open up market segments to tantalum capacitors that currently are being served by other materials. NEC is the world leader in conducive polymer tantalum technology, selling its products under the Neocapacitor name. It and Greenville, South Carolina-based Kemet also will collaborate on the development of next-generation capacitor technologies.

An exchange rate of ¥140=$1.00 was used in this report.

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In an arrangement designed to internationalize the Osaka Mercantile Exchange and to give the New York Mercantile Exchange a foothold in Japan, the two commodities futures exchanges will trade selected items that the other lists. Beginning in FY 1999, members of the OME will trade crude oil, gasoline, gold, platinum and four other commodities on the NYMEX via a link to that organization's Access 24-hour on-line trading system. In time, NYMEX brokers will trade natural rubber and rubber on the OME through the same connection. Other items also could be traded on both exchanges.

An exchange rate of ¥140=$1.00 was used in this report.

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Production of pasta has started at the MEDALLION FOODS INC. plant in Tacoma, Washington. The $25 million, state-of-the-art facility can make 72 tons of pasta a day, drawing on the 600 tons of durum semolina wheat flour that can be stored on-site at any one time. It incorporates manufacturing technologies developed by parent NISSHIN FLOUR MILLING CO., LTD., which, through a subsidiary, is the leading maker of pasta in Japan. Most of Medallion Foods' output is sold on the West Coast or shipped to Japan. The 40-employee company formally was established by Nisshin Flour's FOOD MASTERS (PNW) CORP., which markets flour and batter mixes in the United States from its base in Tacoma.

KYOTARU CO., LTD., which built up through purchases various chains of franchised fast-food outlets and casual-eating places in the United States in the late 1980s and early 1990s before poor results forced it to file for bankruptcy at home in March 1997, has exited the American restaurant business. The last units sold were five Paragon Steak House Restaurants.

An exchange rate of ¥140=$1.00 was used in this report.

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The ownership of one of the earliest Japanese-backed manufacturing operations in the United States is changing. TAMCO founders TOKYO STEEL MANUFACTURING CO., LTD. (25 percent) and AMERON INTERNATIONAL CORP. of Pasadena, California (50 percent) have put up for sale their interests in the Rancho Cucamonga, California manufacturer of steel reinforcing bars. In business since 1976, Tamco had 1997 sales of $139 million. The company has been profitable through the 1990s thanks to the construction boom. Tokyo Steel apparently feels that now is the time to maximize the return on its investment. It will use the sale proceeds to strengthen its operations at home. Ameron executives said that Tamco did not fit in the company's long-run plans. MITSUI & CO., LTD. will retain its 25 percent interest in the minimill.

Divergent business strategies apparently are behind the decision by SUMITOMO ELECTRIC INDUSTRIES, LTD. and PHELPS DODGE CORP. to dissolve their five international wire and cable joint ventures. SEI will take over the Phoenix, Arizona company's half interest in SPD MAGNET WIRE, INC., an Edmonton, Kentucky manufacturer of magnet copper wire that has been in operation since 1990. It also will take control of a company in Thailand. For its part, Phelps Dodge will be the sole owner of two other Thai firms and a business in Venezuela.

For the second time in two months, a Japanese trading company has announced plans for a steel service center near the underserved U.S.-Mexico border. Following in the footsteps of MITSUI & CO., LTD., which will build a processing facility in San Diego, California (see Japan-U.S. Business Report No. 345, June 1998, p. 4), NICHIMEN CORP. expects to construct an $11 million plant in McAllen, Texas to slit and cut steel coils for electronics and automotive manufacturers operating in the area. NITEK MCALLEN, INC. should be in business next January. When capacity is reached in a few years, Nichimen projects the company will have annual revenues of $5 million. Since the fall of 1995, the trader has run a steel service center in Jackson, Mississippi, NITEK METAL SERVICE, INC., with an American firm as a minority investor.

Automotive parts manufacturer YUHARA MANUFACTURING CO., LTD. reportedly is scouting factory sites in the Houston area that it can lease in order to launch production of pipe connector parts for engines and power steering systems. The Tochigi prefecture company will spend $714,300 or so to equip the plant, aiming for start-up in the spring of 2000 with a work force of about 10 people. In time, annual sales are expected to reach $1.8 million. For slightly more than a year, a wholly owned Yuhara Manufacturing subsidiary has been marketing imported pipe connector parts.

An exchange rate of ¥140=$1.00 was used in this report.

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Japan's top producer of commercial air-conditioning systems has found a heavyweight partner to help it return to the American market after a decade-plus absence (see Japan-U.S. Business Report No. 342, March 1998, p. 5). DAIKIN INDUSTRIES, LTD. has formed an equally owned company with MODINE MANUFACTURING CO., the biggest U.S. maker of heat exchangers, to manufacture a new line of packaged, rooftop, air-conditioning systems. DAIKIN-MODINE, INC. will operate out of a Modine facility near Lexington, Virginia. Production will begin in 1999. First-year output is forecast at about 5,000 systems. They will incorporate state-of-the-art technologies, including Modine's PF (parallel flow) heat exchangers. The Racine, Wisconsin- headquartered company will market the equipment through its North American distribution network. Eventually, Daikin-Modine will hire about 200 people after starting off with 20 or so.

Under a 1989 agreement, EBARA CORP. raised its stake to 48 percent from 30 percent in ELLIOTT CO., one of the world's largest makers of turbine and compressor products for the petrochemicals, oil-refining, oil and gas, and power generation industries as well as for industrial air applications and turbochargers. The Japanese pump and air blower manufacturer spent roughly $35.7 million to expand its ownership. Germany's MAN GHH also increased its interest in the Jeannette, Pennsylvania company to 48 percent from 30 percent. Elliott has annual sales of about $357.1 million and employs some 2,000 people around the world. Its ties with Ebara date back to a 1968 licensing agreement covering turbine and compressor products. That deal helped to establish Elliott's strong position in Asian markets. The new ownership arrangement is expected to further boost Elliott's presence in Asia as well as in Europe.

Work has started on SURUGA SEIKI CO., LTD.'s $1 million factory in Addison, Illinois. In October, recently formed MICHIGAN PRECISION INC. should be ready to start producing punches and dies for forming metal molds for stamping presses. These products will be sold to automotive transplants and their parts suppliers, with sales projected at $840,000 in the first year of operations and at $5 million in 2002. Over that time, Michigan Precision's payroll should expand from 12 people to 100.

With demand slowing in Japan for multipurpose diesel engines, both YANMAR DIESEL ENGINE CO., LTD. and KUBOTA CORP. are putting more emphasis on the strong American market. Yanmar is weighing U.S. production. It bought property north of Atlanta in October 1996 that could be used for this purpose. If the go-ahead is given soon, manufacturing could start in 2000. Last year, Yanmar began final assembly of 200-horsepower to 400-hp engines for powerboats at its Buffalo Grove, Illinois subsidiary (see Japan-U.S. Business Report No. 333, June 1997, pp. 4-5). Kubota has a different strategy. The company plans to boost its already strong exports to the United States. To market the larger supply of diesel engines, it made the Rolling Meadows, Illinois engine division of Torrance, California-headquartered KUBOTA TRACTOR CORP. a freestanding business. KUBOTA ENGINE AMERICA CORP., which integrates its parent's various U.S. marketing channels for diesel engines, will launch sales activities this fall.

Early next year, CUMMINS ENGINE CO., LTD. will extend its popular B Series of midrange diesel engines downward with the addition of a 3.3-liter model for mobile industrial applications. The four-cylinder, naturally aspirated and turbocharged engine, which is rated at 55 hp to 85 hp, will be supplied by KOMATSU CUMMINS ENGINE CORP., an Oyama, Tochigi prefecture production venture with KOMATSU LTD. KCEC, which also builds Cummins' 3.9-liter and 5.9-liter diesel engines, will make the new engine for Japan's top construction equipment manufacturer as well. In late 1997, Cummins and Komatsu formed a Japan-based company to design and develop engines for the worldwide construction equipment market (see Japan-U.S. Business Report No. 340, January 1998, p. 15).

SHODA IRON WORKS CO., LTD. of Hamamatsu, Shizuoka prefecture has shipped to NORTHROP GRUMMAN CORP. a super-large, gantry-type CNC (computer numerically controlled) router for machining aircraft parts. The system will be installed at the aerospace giant's Fort Worth, Texas complex, where it will be used to produce covers and other large parts for BOEING CO. 747, 767 and 777 engines. The $1.7 million CNC router is the first such Japan-made product to incorporate a laser measuring system. That capability ensures the high degree of accuracy required in producing aircraft parts. The system also makes routing possible from any angle. With the Northrop Grumman sale, Shoda Iron Works plans to market this and other CNC routers more aggressively to the U.S. aircraft industry.

A new headquarters building is going up in Grand Rapids, Michigan for MICRON-USA, INC., a company formed in 1988 by Yamagata prefecture-based MICRON MACHINERY CO., LTD. (51 percent), the world's largest manufacturer of centerless grinders, and manufacturing systems distributor PRIME TECHNOLOGY, INC., also located in Grand Rapids. Over the last decade, Micron-USA has delivered more than 100 centerless grinders to American customers, primarily in the automotive industry. The new facility not only will house sales and service but also will have added space for product customization and the integration of turnkey manufacturing systems and a room for training.

In the hope of boosting U.S. sales, KAWAGUCHI, LTD., a Shimizu, Shizuoka prefecture maker of plastic injection molding machines, has switched to direct marketing. It did this by buying a 60 percent interest in its former distributor, TOMEN TEC CENTER INC. of Buffalo Grove, Illinois, from trader TOMEN CORP. Within this year, the subsidiary, which now has the Kawaguchi name, plans to set up sales and maintenance operations near both New York and Los Angeles. Through these moves, Kawaguchi expects to raise U.S. sales of its injection molding equipment to $7.1 million in 2000.

New to the American market is a company that manufactures a line of machines for making plastic containers using direct heat-conditioning injection stretch-blow molding technology. AOKI TECHNICAL LABORATORY, INC. of Nagano prefecture opened a subsidiary in Elk Grove Village, Illinois to develop business in the United States and Canada and to oversee sales by six distributors. Its Direct Heatcon molding machines quickly produce containers of many different designs from a wide variety of resins. Each system has three stations, one for preform molding, another for stretch blowing and the third for product ejection. One of Aoki's general-purpose SBIII series molding machines has been installed at the Elk Grove Village facility as a demonstration model. Interestingly, the company opened subsidiaries in Singapore, Germany, Mexico and Brazil before it moved into the American market.

EXPERT MAGNETICS CORP. of Chiba prefecture has licensed COPY PRO, INC. to manufacture for U.S. sale its CP-1000X, a PC-linked machine that prints color labels for recordable compact discs. The Concord, California company, which is in the same business, also has the right to sell the machine under its own brand name. The new partners expect to sell in this country a total of 3,000 CP-1000X or equivalent systems.

Through a recently established Torrance, California subsidiary, environmental equipment maker WORLD CHEMICAL CORP. is marketing a system that recovers usable products from used grease or oil. Sales of the $857,100 machine will be targeted initially at food manufacturers, although it also is suited to the machine tool, automotive and coatings industries. If the Tokyo-based company can meet its sales target of 50 systems in the first year, it will consider onshore assembly.

TOSHIBA CORP. will be a risk- and revenue-sharing partner on GENERAL ELECTRIC CO.'s next generation of power plants, the combined-cycle H System. The world's largest supplier of power-generating equipment claims that through significant improvements in efficiency, the 480-megawatt H System will enable utilities to generate electricity at the lowest cost possible while cutting emissions. A combined- cycle system generates electricity from both a gas turbine and a steam turbine driven by the gas turbine's exhaust. The key innovation in the H System is cooling the gas turbine buckets and nozzles with steam rather than air, thereby allowing higher firing temperatures. Toshiba will manufacture the GE-designed compressor as well as a generator and a steam turbine that it developed. GE will make the gas turbine and supply the integrated system controls. It also will assemble and test the complete gas turbine unit, including the compressor, at a company facility in Greenville, South Carolina. The first commercial H System power plant should be operational in 2001. In Japan, expected to be one of the largest markets for the H System, and in certain other markets, Toshiba will work with GE on sales; elsewhere, GE will have sole marketing rights. The two companies have collaborated on power systems since 1956.

An exchange rate of ¥140=$1.00 was used in this report.

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One of Japan's biggest paper traders and distributors has moved into the American paper recycling market. JAPAN PULP & PAPER CO., LTD. paid an estimated $7.1 million to acquire SAFESHRED CO., INC., a City of Commerce, California company that converts about 22,000 tons of white office-type paper a year into pulp for sale to West Coast paper manufacturers. The new owner hopes to recycle close to 50,000 tons of paper in FY 1999 for revenues of $6.5 million and double that volume within five years. Pulp exports to Japan are a possibility.

An exchange rate of ¥140=$1.00 was used in this report.

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Just months after buying INTERNATIONAL PAPER CO.'s graphics arts film, plate and paper operations (see Japan-U.S. Business Report No. 342, March 1998, p. 5), KODAK POLYCHROME GRAPHICS CO. announced plans to close one of the acquired facilities. Production at the Binghamton, New York plant will stop at yearend, costing about 500 people their jobs. Its products duplicated output at original Kodak Polychrome factories. The Norwalk, Connecticut graphic arts materials manufacturer, formed last fall, is an equal partnership between the SUN CHEMICAL CORP. subsidiary of DAINIPPON INK & CHEMICALS, INC. and EASTMAN KODAK CO. (see Japan-U.S. Business Report No. 338, November 1997, p. 5).

An exchange rate of ¥140=$1.00 was used in this report.

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By coincidence, another Binghamton, New York company, surface-mount assembly equipment manufacturer UNIVERSAL INSTRUMENTS CORP., will continue to be able to draw on the expertise of SANYO HIGH TECHNOLOGY CO., LTD. The two recently extended a 1989 agreement under which the Japanese firm supplies high-speed chip placement machines to Universal Instruments on an original equipment manufacturer basis. The latest is the 4796R HSP, a small-footprint, fast (up to 36,000 parts per hour) component placement system that is said to appeal to communications, computer and other manufacturers concerned about throughput per square foot of floor space.

An exchange rate of ¥140=$1.00 was used in this report.

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Most planned wafer fabrication facilities are on hold because of the slump in the worldwide semiconductor market, particularly the memory end of the business. Nonetheless, NEC CORP. announced that it could start construction of a 300- millimeter (12-inch) wafer fabrication facility at its Roseville, California complex as soon as later this year. The new fab will employ 0.15-micron processing techniques; the circuits in today's state-of-the-art chips are 0.25 micron. The facility initially will have the capacity to turn out 20,000 wafers a month. They will be used for multimedia and system-on-a-chip products as well as for high-density 256-megabit and 1-gigabit DRAMs (dynamic random access memories). Construction costs will be in the range of $1.4 billion. NEC already has invested in excess of $1.3 billion in the Roseville facility, which corporate executives say is one of the company's most productive semiconductor plants anywhere in the world. Operations now are projected to start in 2002. That timing is contingent, however, on market conditions and the state of development of 300-mm wafer fabrication equipment and process technology. Whenever the new fab comes on-line, another 700 or so jobs will be created at Roseville.

Japan's number-one and number-two manufacturers of wafer cleaning equipment — SANKYO ENGINEERING CO., LTD. and SUGAI CO., LTD. — are set to merge in October. When that happens, Kyoto-based Sugai will use the Tokyo company's manufacturing facility in Tempe, Arizona as a production base. Sugai will start off by assembling its Pegasus cleaning system from parts imported from Japan, but in time it plans to source components from U.S. suppliers and begin integrated manufacturing. That is the path SANKYO ENGINEERING OF AMERICA, INC. followed after opening the Tempe plant in April 1991. It now works with 20 or so local companies in manufacturing 8-inch automatic wet benches. Sugai, which shipped its first Pegasus system to an American customer in April 1997, will send 10 engineers to Arizona.

An exchange rate of ¥140=$1.00 was used in this report.

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Japanese businesses and individuals in the United States now have the option of using a transplanted provider of domestic long-distance and transpacific calling services. JAPAN TELECOM CO., LTD.'s New York City subsidiary is charging a flat 30 cents a minute for calls to Japan and 12 cents a minute for calls anywhere in this country. JAPAN TELECOM AMERICA INC. also provides service to most other countries of the world. With its own U.S. facilities, the company plans to wholesale capacity between the United States and Japan and other Asian countries and to add frame relay, ATM (asynchronous transfer mode) and leased-line services for corporate customers. Japan Telecom announced that it would cut the fees it charges American carriers for completing calls in Japan by 25 percent to 15 cents a minute. The Federal Communications Commission made the start of U.S.-Japan service contingent on that change, although Japan Telecom says that it is lowering its interconnection charges for competitive reasons.

On July 1, NTT WORLDWIDE NETWORK CORP. connected its Arcstar frame-relay network with the IBM Global Network frame-relay system operated by INTERNATIONAL BUSINESS MACHINES CORP., thereby providing corporate customers end-to-end data transmission capabilities around the world. The tie-up extends Arcstar's service area to 46 countries from the nine served by NTT Worldwide Network and foreign subsidiaries of NIPPON TELEGRAPH AND TELEPHONE CORP. group members. NTT Worldwide Network and IBM are jointly marketing the service. They also are cooperating on maintenance and billing.

To bring "fiber-to-the-home" technology closer to realization, NIPPON TELEGRAPH AND TELEPHONE CORP. and BELLSOUTH CORP. are pooling their technical knowledge on high-speed optical-fiber network access systems. The specific goal of their R&D collaboration is to drive down the cost of FTTH equipment by developing de facto international standards for the device that allocates optical-fiber signals coming into the home to targeted destinations, such as a television, a PC, a telephone or a LAN (local area network). The broader objective is to make available to homes inexpensive communications services combining video, telephone and data. NTT plans to connect homes in Japan to an optical-fiber network early in the 21st century. It and Atlanta-based BellSouth will propose the outcome of their work to the Full Service Access Network, a group of 14 international communications companies that have teamed up to develop common broadband access system specifications.

The first product resulting from the April alliance between SONY CORP. and MICROSOFT CORP. (see Japan-U.S. Business Report No. 344, May 1998, p. 7) should be ready in 1999. It will be a device to bring video-on-demand, on-line shopping and other two-way services to cable television subscribers. The interactive CATV equipment will combine a set-top box engineered by Sony with Microsoft's Windows CE embedded operating system. The device will be marketed to TELE- COMMUNICATIONS, INC. and other American cable television operators.

SONY CORP. also has tied up with CISCO SYSTEMS, INC. in its quest to be at the forefront of the digital home appliance market. Their work will focus on technology to transmit two-way data flows over CATV networks using faster, higher-capacity coaxial cable rather than the telephone lines now used by cable operators to provide digital services. Drawing on Cisco's Internet Protocol technology, Sony plans to develop a TCP/IP-compliant cable modem that will allow direct connections between PCs and such digital appliances as TVs and audio systems. The new product could hit the U.S. market in 2000.

To expand the North American supply of digital cellular telephones conforming to the CDMA (code-division multiple access) standard, SONY CORP. is producing this product at its Tijuana, Mexico subsidiary for QUALCOMM PERSONAL ELECTRONICS. The joint venture with CDMA licensor QUALCOMM INC. now makes 400,000 cell phones a month at its San Diego, California plant. Sony's Mexican operation adds 50,000 units to that monthly total. QPE's output, which includes PCS (personal communications services) digital mobile phones, is sold under both the Sony and the Qualcomm names.

Osaka's MEGACHIPS CORP., the developer of a digital video transmission system, is projecting initial-year sales of $2 million for its first offshore subsidiary. DIGITAL IMAGE, INC., located in Cupertino, California, is lining up marketing channels for the product. It hopes to tie up with an American company to tailor equipment incorporating its parent's moving-image compression and transmission technologies to U.S. market requirements.

An exchange rate of ¥140=$1.00 was used in this report.

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The Viscotec system for digitally printing fabrics using up to 16.7 million colors is coming to the United States in late 1999. Developer SEIREN CO., LTD. has earmarked $21.4 million for plant construction. A final decision apparently has not been made on the facility's location. One possibility, though, is Cramerton, North Carolina, where the firm is a minority investor (20 percent) with J.P.S. TEXTILE GROUP in CRAMERTON AUTOMOTIVE PRODUCTS, L.P., a manufacturer of automotive textiles. Seiren has enlisted the help of E.I. DUPONT DE NEMOURS & CO., INC. in marketing Viscotec-printed fabrics to both clothing manufacturers and the automotive industry. The chemical giant also will supply ink to the Viscotec plant. By linking customers with the printing plant via computer-aided design and manufacturing terminals, the Viscotec system offers quick turnaround of customized batch lots of fabric. Seiren hopes to build the Viscotec technology into a $35.7 million business in the United States in 2001.

An exchange rate of ¥140=$1.00 was used in this report.

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The costs and the technical challenges of meeting the automotive industry's technology requirements are behind two development tie-ups between TOYOTA MOTOR CORP. and GENERAL MOTORS CORP. First, they will collaborate on an inductive charging system for electric vehicles based on GM's Magne-Charge inductive charge technology. Unlike the conductive charging system used by Toyota and other manufacturers, which involves a direct, metal-to-metal plug connection between the power source and the vehicle, the GM method creates an electromagnetic connection. The Japanese company claims that the inductive system offers a trouble-free connection and weighs less than the conductive approach. In fact, it believes that the inductive charging system that results from its work with GM will be the world standard for electric vehicles. The two companies plan to refine GM's technology by incorporating a smaller charge "paddle" connector for both the power source and the vehicle's charge port.

The second strategic alliance between TOYOTA MOTOR CORP. and GENERAL MOTORS CORP. centers on fuel-cell technology for future electric vehicles. A fuel cell uses a chemical reaction between hydrogen and oxygen to generate electricity to power a generator, thereby eliminating or at least reducing the pollution created by conventional internal combustion engines. In the initial phase, Toyota and GM engineers will exchange information through four or five meetings a year. A group composed of MAZDA MOTOR CORP., FORD MOTOR CO., DAIMLER-BENZ AG and a Canadian company also is working on automotive-use fuel cells (see Japan-U.S. Business Report No. 344, May 1998, p. 9).

Twelve years after their equally owned company started to produce turbochargers, ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD. bought out BORG-WARNER CORP.'s share in Shelbyville, Illinois-based WARNER-ISHI CORP. for an undisclosed price. The deal also included the American company's share in their Italian turbocharger venture. Hoping to position itself as the world's second-biggest producer of turbochargers, IHI plans to double worldwide production to 1.5 million units in 2002, including 200,000 made in the United States.

Full-scale operations have been reached at UNIVANCE INC., the wholly owned Winchester, Kentucky subsidiary of FUJI UNIVANCE CORP. The plant's 120 or so workers are making all the automatic transmission parts that the parent sells in the United States, including side covers, clutch pistons and manual shafts for vehicles manufactured locally by HONDA MOTOR CO., LTD. and NISSAN MOTOR CO., LTD. They also build transmissions for an unnamed producer of forklifts. Univance projects sales of $15 million this year and $27 million in 1999.

Year-old ADA TECHNOLOGIES INC. forecasts a tenfold jump in revenues in FY 2000 from FY 1997's figure of $1.8 million. The wholly owned Columbus, Ohio subsidiary of ATSUMITECH CO., LTD., an affiliate of HONDA MOTOR CO., LTD., makes shift levers for the automatic transmissions of Accords assembled in nearby Marysville, Ohio. It also turns out automatic transmission control shafts for Accords and Civics.

The automotive division of U.S. TSUBAKI, INC. also expects strong sales growth in the medium term. In 2002, the manufacturer of timing chain drive systems, including chain, sprockets, tensioners and guides, predicts that it will make 3 million units versus 1.4 million units annually at present. The company just added FORD MOTOR CO. as a customer. It joins longtime buyers GENERAL MOTORS CORP. and NISSAN MOTOR CO., LTD. UST's automotive division also is trying to gain the timing chain business of other Japanese transplants in North America. Its goal is to win 30 percent of the U.S. timing chain market. Last year, the group moved to its own plant in Chicopee, Massachusetts. Previously, it had shared space in Holyoke, Massachusetts with UST's roller chain division. UST, which has five American plants, is a wholly owned subsidiary of TSUBAKIMOTO CHAIN CO., the world's top manufacturer of chain and power transmission components.

Since 1974, TOYOTA MOTOR CORP. has invested close to $700 million in TABC, INC., a Long Beach, California manufacturer of cargo beds for pickup trucks, body stampings, steering columns and catalytic converters. The latest outlay, amounting to $20 million, was used to boost catalytic substrate capacity to 2.7 million units a year from 1.5 million. TABC's products go to Toyota's North American assembly plants. Some of them also are exported to Japan.

With an order in hand from GENERAL MOTORS CORP. for switches for pickup trucks, NILES PARTS CO., LTD. is adding a second factory at the Winchester, Kentucky site of its WINTEK INC. subsidiary. The company expects to spend $2.5 million for the plant and $5 million on equipment. Operations are slated to begin at the start of 1999. The new facility should boost employment to between 120 and 130 people from 75 now. Wintek is projecting FY 2002 sales of $45 million, with 40 percent of that amount generated by GM. It also hopes to gain contracts from CHRYSLER CORP. and FORD MOTOR CO. The subsidiary's FY 1997 revenues were around $10 million.

Bigger orders from GENERAL MOTORS CORP. and CHRYSLER CORP. are behind a 40 percent capacity expansion now underway at A-MOLD CORP., a Mason, Ohio manufacturer of aluminum wheels. When the new machining and coating lines are installed, the eight-year-old UBE INDUSTRIES, LTD. subsidiary will be able to manufacture 1.4 million wheels a year. It uses a Ube-developed process called squeeze processing to produce a lightweight but strong wheel that can be chrome plated. A-Mold's 1997 sales were in the neighborhood of $100 million. This year, it expects to do between $140 million and $150 million worth of business.

Business also is booming for BRIDGESTONE/FIRESTONE, INC. To meet the strong demand for radial light truck tires, parent BRIDGESTONE CORP. will spend $80 million to expand capacity at its newest operating U.S. tire plant, a factory in Morrison, Tennessee. By the end of 1999, the facility will be able to make 7,500 tires a day, up 20 percent from current production. The expansion also will increase employment to 1,000 or so from 885 at present. Bridgestone is building a big radial car and light truck tire plant in Aiken County, South Carolina. Production there is scheduled to start in the spring of 1999 (see Japan-U.S. Business Report No. 335, August 1997, p. 7).

MITSUBISHI MOTORS MANUFACTURING OF AMERICA INC. of Normal, Illinois has awarded CHERRY CORP. a contract for all the fog-lamp and hazard-light switches and electric mirrors used in the Galant sedan built in the United States. Last year, MMMA turned out 42,820 Galants versus 57,013 in 1996. Waukegan, Illinois-based Cherry also does business with TOYOTA MOTOR CORP. and HONDA MOTOR CO., LTD. The company hopes the new deal will help it expand sales in Japan, where it operates an engineering center in Yokohama through a joint venture with connector manufacturer HIROSE ELECTRIC CO., LTD.

Automotive seating manufacturer TACHI-S CO., LTD. has opened a new North American headquarters in Farmington Hills, Michigan. The facility houses expanded design, engineering, prototype, testing and administrative offices. The company believes that one of its greatest strengths is the ability to do development work round- the-clock through TACHI-S ENGINEERING U.S.A. INC.'s new facility and its R&D center in Aichi prefecture. The U.S. subsidiary provides design, engineering, prototype and testing services for seating systems to OEMs and Tier 1 suppliers. The company also is a partner in three separate U.S. production ventures.

An exchange rate of ¥140=$1.00 was used in this report.

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Despite help from MITSUI & CO., LTD. and another company, Japanese auctioneer AUCNET INC. has not been able to make a profit from its U.S. business. Therefore, it is liquidating its Smyrna, Georgia subsidiary. Since 1994, it has sold used vehicles via a satellite-based communications system developed in-house. Participants in the weekly auctions bid from terminals at automotive dealerships. However, Aucnet had trouble lining up enough dealers to make a go of it.

An exchange rate of ¥140=$1.00 was used in this report.

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American Companies in Japan


The S.C. Johnson Polymer division of S.C. JOHNSON COMMERCIAL MARKETS, INC. has licensed Asian Pacific rights to its SGO polymer technology to TOAGOSEI CO., LTD. Applications for the continuous bulk polymerization technique covered by the agreement include coatings, adhesives, plastics, electronic materials and dispersants. Toagosei, a manufacturer of various acrylic polymers, plans to build a SGO polymer technology pilot plant and to begin market development next year. The Sturtevant, Wisconsin business and its new partner will collaborate on enhancements to the current SGO technology base. Much of that work will be conducted by the Japanese chemical company and Tokyo-headquartered JOHNSON POLYMER CORP., a joint venture between S.C. Johnson Polymer and TOYO INK MANUFACTURING CO., LTD. S.C. Johnson Commercial Markets is a S.C. JOHNSON & SON, INC. subsidiary.

The local supply of a liquid crystal polymer resin developed by E.I. DUPONT DE NEMOURS & CO., INC. and marketed by that company as Zenite soon will expand. The chemical giant provided its LCP resin product and process technology to DAINIPPON INK & CHEMICALS, INC., which will start production this summer at its Komaki, Aichi prefecture factory. DIC will market the product under the Okuta trade name. DuPont Zenite 6000 and 7000 Series LCP resins are designed for applications requiring high temperature performance, retention of properties over a wide temperature range, dimensional stability, chemical resistance and strong electrical properties. Thus, they are suited for use in the automotive, electrical/electronic, fiber- optic, communications and aerospace industries.

This fall, E.I. DUPONT DE NEMOURS & CO., INC.'s subsidiary will begin to market a new dry film form to manufacturers of integrated circuit packaging and high-density printed circuit boards. Within three to four years, the company, the world's biggest producer of dry film photoresists, expects local ViaLux 7081 sales to total $7.1 million. That would be equivalent to roughly 30 percent of the Japanese photodielectric materials market. Japan controls majority shares of both the IC packaging and the PCB markets. ViaLux 7081, applied by lamination, is the first generation of a new DuPont class of dielectric materials.

New on the market from SUMITOMO 3M LTD. is the 3M Heat-Resistant Adhesive Sheet 1580. The polyolefin-based adhesive tape is priced around $560 per sheet. The MINNESOTA MINING & MANUFACTURING CO. affiliate is projecting first-year sales at $714,300.

Japan will be the first country where MINNESOTA MINING & MANUFACTURING CO. markets a new substitute for ozone-depleting chlorofluorocarbon materials used in cleaning applications in the electronics industry. 3M HFE-7200 (hydrofluoroether) is a clear, colorless fluid that is claimed to have no ozone-depletion potential as well as other desirable environmental attributes. SUMITOMO 3M LTD. has priced the product at about $21 per pound. Given the strong anticipated demand, it believes that sales will total $7.1 million in the initial year of marketing. 3M HFE-7200 will be available in the United States before yearend.

OTSUKA PHARMACEUTICAL CO., LTD. is seeking from the Ministry of Health and Welfare the right to market the first kit that tests urine samples for antibodies to HIV (human immunodeficiency virus). CALYPTE BIOMEDICAL CORP. developed the test, which went on the American and European markets in mid-June through Indianapolis, Indiana-based SERADYN, INC., a subsidiary of MITSUBISHI CHEMICAL CORP. Alameda, California-based Calypte awarded O-tsuka exclusive Asian marketing rights to the Calypte HIV-1 Urine EIA test in the fall of 1996. The Japanese drug firm owns 10 percent of the American developer.

A treatment for narcolepsy could be available in Japan in the future. CEPHALON, INC. gave NIPPON SHOJI KAISHA, LTD. rights to develop and market modafinil there. The drug, which the West Chester, Pennsylvania biopharmaceutical company licensed from its French developer, already is being used in certain European countries to treat the chronic, lifelong sleep disorder. The Osaka supplier of medical products will make milestone payments to Cephalon and pay royalties on sales.

CELTRIX PHARMACEUTICALS, INC. will have to find a new partner to develop and commercialize SomatoKine for the treatment of osteoporosis in Japan. YOSHITOMI PHARMACEUTICAL INDUSTRIES, INC., which took over struggling GREEN CROSS CORP. in April, recently notified the Santa Clara, California biopharmaceutical business that it intended to end the work that Green Cross had been doing with Celtrix on SomatoKine under a 1994 agreement.

Clinical trials have started in Japan of a microbubble-based ultrasound contrast agent developed by IMARX PHARMACEUTICAL CORP. The Tucson, Arizona company gave YAMANOUCHI PHARMACEUTICAL CO., LTD. rights to to distribute DMP 115, one of the first perfluorocarbon-based ultrasound contrast agents, throughout Asia for cardiologic and radiologic imaging applications. ImaRx will manufacture DMP 115 and supply it to the big Japanese drug company, which is calling the agent YM454. It is made up of lipid-coated microbubbles containing perfluorocarbon gas.

An exchange rate of ¥140=$1.00 was used in this report.

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In a deal worth $15 million, EVANS & SUTHERLAND COMPUTER CORP. worked with HONDA MOTOR CO., LTD. on the design and construction of image generators for motorcycle training simulators and built and delivered visual systems for 300 simulators. RIKEI CORP. is the Salt Lake City, Utah maker's distributor. The systems are based on Evans & Sutherland's Liberty image generation technology. They are integrated with a motion system, a sound-generation system, a host computer and an instructor station.

By yearend, the subsidiaries of COMPAQ COMPUTER CORP. and DIGITAL EQUIPMENT CORP. will follow their parents down the merger path. The combined company, which will retain the Compaq name, will be a one-stop source of hardware from the most powerful servers to home PCs as well as computer systems management and maintenance. Between them, the two local operations have annual sales of $1.7 billion and employ 3,600 people.

Regional and other smaller banks that cannot afford to have redundant computer systems now have an option for maintaining banking operations should a natural disaster or other mishap knock out their equipment. UNISYS CORP.'s subsidiary opened a computer center in Tokyo that client banks can use in an emergency. They simply need to install their programs on the backup center's computers to continue deposits, withdrawals, loans and other services. Unisys already has contracts with two banks.

Experimenting with different ways to inject life into sales of Aptiva home computers and ThinkPad notebook systems in Japan's slumping PC market while still making some money, IBM JAPAN LTD. has launched a service with big appliance retailer KOJIMA CO., LTD. that delivers machines to customers directly from IBM Japan factories. Kojima sales personnel place orders for buyers via IBM Japan's direct-order system for home delivery in about two days. Customers are charged Kojima's store prices, which are 20 percent to 30 percent less than if they ordered the computers directly from the manufacturer. For the retailer, the deal means that it can offer the full range of IBM Japan models without maintaining inventory. At the same time, the computer maker does not have to worry about getting stuck with unsold stock. IBM Japan also has initiated direct-sales arrangements for home PCs with several other retailers, including BEST DENKI CO., LTD. and DEODEO CORP.

In a related move, IBM JAPAN LTD. plans to end marketing of home PCs through its main distributor, CANON SALES CO., INC. However, that company will continue to handle sales to corporate customers (see Japan-U.S. Business Report No. 345, June 1998, p. 10). Early this year, Canon Sales forged a marketing relationship with COMPAQ COMPUTER CORP. on a new line of Presario PCs for the home (see Japan- U.S. Business Report No. 341, February 1998, p. 12).

People in the Nagoya area interested in buying a PC from GATEWAY 2000, INC. have a new option. The mail-order company's subsidiary opened a store in the city where buyers can order customized systems after testing out display models. Gateway also has stores in Tokyo and Osaka.

Redefining the high end of the computer market, SILICON GRAPHICS, INC. released worldwide the Cray SVI series of vector supercomputers. The new CMOS (complementary metal-oxide semiconductor) machines run off processors with a theoretical peak performance of 4 gigaflops (4 billion calculations per second), twice as quick as SGI's fastest processors today. These can be mixed with 1-gigaflop processors to handle varied problems and workloads. For even greater efficiency, each 4-gigaflop processor can be run as four 1-gigaflop processors. The Cray SV1 also offers a single-cabinet node with a peak performance up to 32 gigaflops in a symmetric multiprocessing architecture. In addition, the vector supercomputer comes with a suite of clustering tools that tightly couple nodes using message-passing programming models to produce systems with up to 1 teraflop (trillion calculations per second) of peak performance and 1 terabyte of memory. In Japan, the basic configuration of the Cray SV1 will lease for $14,300 a month. With the big boost in price/performance, SGI's subsidiary expects new customers for the Cray SV1 as well as businesses upgrading from Cray J90, Cray C90 and Cray Y-MP systems.

The redesign of STRATUS COMPUTER, INC.'s Continuum Series of high- performance computers has been completed. Like the entry-level 400 models introduced at the end of 1997 (see Japan-U.S. Business Report No. 340, January 1998, p. 11), the four midrange 600 models and the four high-end 1200 models combine reduced instruction-set computing-based SMP technology via HEWLETT- PACKARD CO.'s 64-bit PA-RISC 8000 processors with the Marlboro, Massachusetts company's continuously available architecture. All three lines also run the HP-UX 10.20 operating system. Continuum Series 600 and 1200 buyers have a choice of three processor speeds and configurations with up to four processors. The 600 models, designed for fault-tolerant computing in distributed and departmental environments, start at $489,300, while the 1200 machines, targeted at on-line transaction processing applications, are priced from $885,700.

COMPAQ COMPUTER CORP.'s subsidiary is pitching the Tandem Integrity XC platform for telecommunications applications as delivering greater availability than other high-availability systems at a lower price. Packaged as two-node to six-node Pentium Pro systems, the Integrity XC consists of Compaq ProLiant servers, SANTA CRUZ OPERATION, INC.'s SCO UnixWare 2.1.2 and Tandem NonStop Clusters software. NonStop Clusters for SCO UnixWare is a highly scalable, clustered operating environment that enables a group of Unix-based ProLiant servers to operate as a single, reliable computing source. Pricing of the Integrity XC begins at $59,000.

Affordable performance. That concept is at the heart of the Windows NT Workstation 4.0-based Compaq Professional Workstation AP400 from COMPAQ COMPUTER CORP.'s local operation. The first product in what will be a line of AP workstations, the AP400 combines one or two 350-MHz or 400-MHz Pentium II processors with high- performance two-dimensional or three-dimensional graphics for CAD, architectural engineering and construction, financial trading and digital content creation applications in a slim desktop design. The 2D model, the AP400 640/2D+, costs $5,300 and up. The AP400 640/3D+ is priced from $8,200.

A total of 12 models have been added to the HP Kayak PC Workstation family from HEWLETT-PACKARD JAPAN LTD. The line's high end is now defined by XW products. These dual processor-capable machines featuring the 400-MHz version of the Pentium II Xeon processor are claimed to deliver the fastest 3D graphics in a Windows NT Workstation 4.0 operating environment, thanks to HP VISUALIZE fx6 graphics technology. The base configuration of the HP Kayak XW PC Workstation is priced at $10,900. For 2D and entry-level 3D graphics applications, HP Japan is offering the HP Kayak XU PC Workstation. These models also are built around one or two 400-MHz Pentium II Xeon processors, but they incorporate a new HEWLETT- PACKARD CO.-designed motherboard for greater power. XU pricing begins at $6,100. At a starting price of $3,400, HP Japan is marketing the HP Kayak XA-s PC Workstation for high-end office applications, financial modeling, software development, 2D electronic and mechanical design and digital content creation. Running off various Pentium II chips, these desktop and minitower machines also have dual-processor capability.

Many firsts are being claimed for the latest midrange addition to the HP NetServer line of PC servers. The HP NetServer LH 3 system is said to be the first to combine 350- MHz and 400-MHz Pentium II processors, redundant component design, an integrated disk-array controller and new, high-performance Ultra2 disk drives. It also is the first HP NetServer to come with HP OpenView ManageX/SE. HEWLETT-PACKARD JAPAN LTD. has priced the LH 3 from $7,400. In late August, it will ship the HP NetServer LC 3. It, too, runs off the latest Pentium IIs but does not have all the high- end features of the LH 3. Accordingly, the LC 3 costs $4,700 and up.

The midrange PC server market also is the target of the four-member Aquanta DS/2 line from UNISYS CORP.'s subsidiary. Configurable with one or two 233-MHz or 333- MHz Pentium II processors, the new machines come standard with an on-board Ultra Wide SCSI (small computer system interface) controller, an on-board video controller and six hot-swap drive bays. Eight expansion slots and a 256-bit data bus are provided for growth requirements. Aquanta DS/2 pricing begins at $10,600.

With PC sales in Japan down again in the second quarter of 1998, American competitors have grown even more cautious about introducing new products. Value pricing of machines with the "right" features is the common strategy of companies braving the market. For instance, HEWLETT-PACKARD JAPAN LTD. is selling for $3,300 and up three models in the HP Vectra VL Series 8 family. These machines pair either a 350-MHz or a 400-MHz Pentium II processor with the Windows NT Workstation 4.0 operating system.

More frequently, though, American PC manufacturers are pushing systems powered by the low-cost Celeron processor. Examples include three models in the HP Vectra VE line. HEWLETT-PACKARD JAPAN LTD. lists these 266-MHz or 300-MHz products from $1,400. For $1,600, COMPAQ COMPUTER CORP.'s subsidiary is marketing a 266-MHz Celeron Deskpro EP model, although another member of this line runs off a 333-MHz Pentium II. .....DELL COMPUTER CORP., however, is the first competitor to bring sub-$1,000 pricing to the Wintel market in Japan. Its OptiPlex G1 and OptiPlex E1, both of which use a 266-MHz version of the Celeron processor, are priced right at or just under the $1,000 threshold.

U.S. manufacturers also generally are tweaking their notebook product lines rather than introducing whole new series. For instance, DELL COMPUTER CORP.'s unit added to its Inspiron 3200 family a machine running off a 233-MHz Pentium II processor with MMX technology. Priced from $2,700, the Inspiron D233XT features a 13.3-inch active-matrix TFT (thin-film-transistor) display and a DVD-ROM drive.

One exception is GATEWAY 2000, INC., which released the four-model Solo 2500 line. Like the company's other notebooks, buyers can customize the machines to their requirements and budgets, including choosing the speed of the Pentium II processor with MMX technology, the size of the internal memory and the hard disk's capacity. An equally big selling point, though, is the Solo 2500's long battery life — up to four-and- a-half hours. Pricing begin around $1,900.

The lineup of Presario home computers sold in Japan has undergone a significant expansion. The eight new models from COMPAQ COMPUTER CORP.'s subsidiary include a second machine aimed at what in the United States is called the sub-$1,000 market. Powered by a low-cost K6 processor from ADVANCED MICRO DEVICES, INC., the Presario 2254 is targeted at people who want a computer mainly to access the Internet. Capping off the new products is the Presario 5130, which uses a Pentium II processor and comes with a second-generation DVD-ROM drive. Pricing is open on all the new models.

Convinced that the market for handheld computers running the Windows CE operating system will take off this year, COMPAQ COMPUTER CORP.'s local operation has released two products. The C Series 2010c, which has a color display and comes standard with a 20-megabyte memory, costs about $860. For roughly $660, a buyer can get the C Series 810 with a monochrome display and 8 megabytes of memory. That model weighs less than a pound, while the color version is slightly heavier.

A localized version of COBALT MICROSERVER, INC.'s compact (7 x 7 x 8 inches), affordable ($2,800) Cobalt Qube 2700 microserver for Internet and network application developers is available through NISSHO ELECTRONICS CORP. The Mountain View, California start-up's product includes the Linux operating system, the Apache Web server and all the other software that Internet service providers and developers need to design and deliver network applications, Web sites and communications. Once installed, the Cobalt Qube 2700J can handle over the course of a day 250,000 Web pages, 140,000 electronic mail messages and 50,000 transfers of 200-kilobyte files. That capability, Cobalt Microserver says, is more than enough to satisfy the requirements of 100 active users.

Hopkinton, Massachusetts-based EMC CORP., a leader in the field of enterprise storage systems, believes that it has found the way to virtually guarantee nonstop file access over departmental and enterprise networks. Its solution is the Celerra File Server, which works through optimized file access and transfer routines. Each Celerra File Server consists of a Symmetrix enterprise cached disk storage system for Unix, Windows NT, AS/400 and mainframe environments; data movers, which provide data channels between Symmetrix and the network; a real-time, embedded operating system optimized for high-performance network file access; and a control station.

Enterprise storage system competitor INTERNATIONAL BUSINESS MACHINES CORP. simultaneously released in the United States and Japan the IBM Versatile Storage Server. This centralized, shared disk storage system allows big companies to centrally manage storage across mixed-server environments. It supports multiple Unix, Windows NT and AS/400 servers from all the leading computer makers and allows true data-sharing among "like" servers. The company also claims for the IBM Versatile Storage Server one of the highest levels of data integrity and availability. IBM JAPAN LTD. has priced the product at $356,200.

At $8,000 and up, DIGITAL EQUIPMENT CORP.'s subsidiary is providing an affordable solution to the storage requirements of midsized networks. The DIGITAL StorageWorks RAID Array 3000 is a fully integrated UltraSCSI RAID (redundant arrays of independent disks) subsystem for use with Windows NT, Open VMS and popular Unix operating systems. The compact pedestal enclosure has room for seven disks. With DEC's new 9.1-gigabyte Ultra Wide SCSI drives, the RA 3000 provides 63 GB of capacity. Use of an expansion pedestal raises that total to 127 GB.

Visual computing applications that demand high bandwidth but not the data redundancy of RAID are the target market for the latest addition to CIPRICO INC.'s line of Fibre Channel products. The FibreSTORE disk array, to be available through distributors in August, handles any combination of four to nine disk drives in a single enclosure. The Minneapolis manufacturer initially is offering a choice of 9.1 GB or 18.2 GB drives with FibreSTORE for up to 162 GB of on-line storage in each cabinet. Platform-specific packages are available for machines from SILICON GRAPHICS, INC. and SUN MICROSYSTEMS, INC. as well as Windows NT environments. For Windows NT imaging applications that do require RAID protection, Ciprico has RaidiaNT. Based on the company's 7000 Series of Fibre Channel RAID disk arrays, the package includes everything needed to take advantage of the performance of full-speed Fibre Channel technology, including a PCI (peripheral component interface)-to-Fibre Channel adapter and a graphical user interface utility. To backstop sales of these and other Fibre Channel products, Ciprico will open a subsidiary in August.

The world leader in digital linear tape libraries, EXABYTE CORP. of Boulder, Colorado, has released in Japan the first member of a new family. The Exabyte 230D Automated DLT Tape Library accommodates one or two QUANTUM CORP. DLT 4000 or DLT 7000 tape drives and 30 Exatape data cartridges. With the former drive, the product can store 1.2 terabytes of compressed data with a data transfer rate of 6 megabytes per second. With the latter, compressed capacity goes up to 2.1 terabytes, and the data transfer speeds zooms to 20 MB per second. Either drive makes the Exabyte 230D suitable for unattended backup/restore, remote storage and automated archiving of client/server networks and departmental applications servers.

QUANTUM CORP.'s subsidiary has introduced a competing product. The PowerStor L500, which can incorporate up to three DLT tape drives, can be configured with either the DLT 7000 or the DLT 4000 tape system. With a DLT 7000, nearly 1 terabyte of compressed data can be stored in the space of 1.3 cubic feet; data transfers at up to 30 MB per second. With a DLT 4000, 560 GB of compressed data storage are provided. Both versions of the PowerStor L500 come with 14 cartridges in two magazines. Milpitas, California-based Quantum released at the same time the PowerStor L200 autoloader. It, too, is offered with either a DLT 4000 or a DLT 7000 drive. Eight cartridge slots are available: six in a removable magazine, plus two fixed ones. Both products are designed to back up and archive enterprise data stored on Unix and Windows NT servers.

An internal DLT drive for backing up high-end servers also is on the market from HEWLETT-PACKARD JAPAN LTD. The HP SureStore DLT 40i, which costs around $2,500, offers 40 GB of compressed capacity on a single tape. Companies that want to automate network backup can take advantage of the $4,800 HP SureStore DAT24x6i autoloader. This product provides random access to five 410-foot DDS-3 data cartridges in a compact, removable magazine. Each cartridge can store 24 GB of compressed data with a transfer rate of 2 MB per second.

The new Able family of high-volume multifunctional copiers from FUJI XEROX CO., LTD. incorporates the Medalist disk drive from SEAGATE TECHNOLOGY, INC. The 2- gigabyte drive provides the capacity to digitally store the images being photocopied, faxed, printed or scanned. That allows users to establish job caching, utilize Fuji Xerox's Super XBIT technology for photorealistic output or otherwise maximize system productivity.

LOGITECH, INC.'s subsidiary has released a number of new wheel mice for PCs. All of the Fremont, California company's products include a wheel for scrolling through a document. Among the products is the $39 Wheel Mouse for Notebooks, which powers down when not in use to help mobile users save battery life. Also new is the $89 Cordless Wheel Mouse. It uses radio frequency to communicate with the PC. All the new mice support the various versions of the Windows operating system.

The StarFighter family of graphics accelerator boards from REAL 3D, INC. will be distributed by NISSHO ELECTRONICS CORP. Based on INTEL CORP.'s new 740 chip, StarFighter is available as both a PCI board and an AGP (accelerated graphics port) board. Nissho Electronics expects the highly rated graphics boards to generate sales of $7.1 million. Orlando, Florida-based Real 3D is owned by LOCKHEED MARTIN CORP. (80 percent) and Intel. It has an agreement with SEGA ENTERPRISES, LTD. to develop arcade graphics chips and boards. The company also works on 3D technology with Intel.

Three-dimensional graphics users who require high-performance geometry processing for high-polygon-count mechanical CAD or animation models are the target customers for ACCELGRAPHICS, INC.'s latest graphics subsystem. The AccelGMX 2000 accelerator comes with an unusual 96 MB of memory. Distributor MEMOREX TELEX CO., LTD. has priced the subsystem at $3,600. It believes that 1,000 units can be sold in the first year to companies using such CAD applications as Pro/ENGINEER, EDS/Unigraphics and SDRC I-DEAS or animation programs like Softimage, LightWave 3D and 3D Studio MAX.

Digitalsite, a new computer graphics studio opened by SUMITOMO CORP., SUMITOMO ELECTRONICS CO., LTD. and a third owner, has installed a frost virtual studio supplied by DISCREET LOGIC INC. as well as the Reading, Massachusetts company's visual effects solution. frost runs on two SILICON GRAPHICS, INC. Onyx2 graphics workstations. Digitalsite, which serves production companies that need virtual technology to produce commercials, broadcast programming and corporate videos, is the first Japanese organization to buy a virtual studio from Discreet Logic.

The latest automated data collection system from NATIONAL COMPUTER SYSTEMS, INC. is touted as providing unparalleled data collection efficiency in such critical applications as admissions, testing, payroll, order entry and surveys. The NCS 5000i Image System also allows intermixing of various data entry methodologies. The Edina, Minnesota manufacturer's longtime distributor, MITSUBISHI OFFICE MACHINERY CORP., has priced the system from $200,000. It is forecasting annual sales of 30 units.

An exchange rate of ¥140=$1.00 was used in this report.

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VICOR CORP., a maker of high-density power components, including AC/DC and DC/DC converters and complete power systems, has gained a presence in Japan. The Andover, Massachusetts company bought the major assets of JAPAN TOBACCO INC.'s money-losing switching power supply businesses for an undisclosed amount. JTI became Vicor's sole manufacturing and marketing licensee in Japan in 1995. The purchase covers the manufacturing equipment and inventories of JT POWERCRAFT CORP. and the business goodwill, including customer lists, of JT ELECTRONICS CORP., a marketing company. Vicor will transfer the production equipment, which it supplied, to its Andover factory. Many of the key people at JT Electronics are moving over to newly formed VICOR JAPAN CO., LTD., which now will market Vicor's products. Japan Tobacco will liquidate both of its subsidiaries.

In another buyout, ORBOTECH, INC. is acquiring the domestic printed circuit board sales and marketing operations of TOYO INK MANUFACTURING CO., LTD. as well as the Solio computer-aided manufacturing product line developed by Toyo Ink's Israeli subsidiary. The price was not disclosed. The Billerica, Massachusetts company makes and markets automated optical inspection systems for use in the production of PCBs. It also manufactures CAM systems and laser plotters for PCB production.

Two new power-protection products are on the market from AMERICAN POWER CONVERSION's subsidiary. The $129 PowerManager provides centralized power management and surge protection for up to five peripherals, including PCs, CD-ROM drives, monitors, printers, fax machines and modems. The West Kingston, Rhode Island firm's ISDN (integrated services digital network) ProtectNet is designed to protect against surges on modem and other data lines. The PISDN is priced at $34.

An exchange rate of ¥140=$1.00 was used in this report.

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To improve efficiency and cut costs, EXXON CORP.'s two subsidiaries are expected to start to merge headquarters functions later this year. ESSO SEKIYU K.K. and GENERAL SEKIYU K.K., over which Exxon gained operating control last August (see Japan-U.S. Business Report No. 336, September 1997, p. 13), will combine their business, general affairs and accounting departments. They also will reduce the size of their boards of directors and their payrolls. The goal is to cut costs by roughly $71.4 million. A formal merger is not planned, both for tax reasons and because each company's service stations likely would object. Together, Esso Sekiyu and General Sekiyu ranked sixth in Japan's oil industry in FY 1997 with an 8.7 percent market share.

An exchange rate of ¥140=$1.00 was used in this report.

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A new benchmark has been established for the changes sweeping Japan's limping financial services sector and how American competitors are capitalizing on the openings. Financial services powerhouse TRAVELERS GROUP INC. will acquire a 25 percent stake in NIKKO SECURITIES CO., LTD., Japan's third-biggest brokerage house, for roughly $1.6 billion. That will be the largest investment to date by an American company in a Japanese financial institution. It will make Travelers the top shareholder in Nikko Securities, displacing BANK OF TOKYO-MITSUBISHI, LTD. Equally important, Travelers and the securities firm will establish a joint brokerage business in Tokyo capitalized at $1 billion. Nikko Securities will own 51 percent of NIKKO SALOMON SMITH BARNEY LTD., with Travelers' SALOMON SMITH BARNEY INC. investment banking/securities company putting up 49 percent of the capital but running the show. The Japanese partner effectively will transfer its investment banking and institutional trading operations to the partnership. All of Salomon Smith Barney's Japan-based businesses with the exception of its arbitrage trading unit will be folded into the joint venture, which will open its doors next January. Nikko Securities will hold onto its 125 nationwide brokerage offices and specialize in trades for retail customers. That network will afford Salomon Smith Barney the chance to sell its products to Japan's growing number of individual investors as well as give it access to many of the nation's biggest corporations. Overseas, Nikko Securities will close about two-thirds of its subsidiaries and offices by yearend and transfer their operations to Salomon Smith Barney. Earlier this year, the two companies formed a pair of businesses to assess the performance of investment trusts, or Japan-style mutual funds, and to market wrap accounts (see Japan-U.S. Business Report No. 343, April 1998, p. 13).

MERRILL LYNCH & CO., INC. — which rocked competitors both in Japan and at home earlier this year by announcing plans to build a nationwide retail brokerage business using offices and employees of failed YAMAICHI SECURITIES CO., LTD. (see Japan- U.S. Business Report No. 342, March 1998, p. 15) — merged its three Japanese asset-management companies effective July 1. Newly formed MERRILL LYNCH ASSET MANAGEMENT JAPAN CO., LTD. combines MERRILL LYNCH INTERNATIONAL CAPITAL MANAGEMENT CO., LTD., MERCURY ASSET MANAGEMENT JAPAN LTD. and MERCURY INVESTMENT TRUST MANAGEMENT CO., LTD. The 200-employee company manages more than $10.7 billion in corporate, institutional and retail assets, making it one of the biggest, if not the biggest, foreign asset-management business in Japan. The merger follows Merrill Lynch's acquisition last December of London-based MERCURY ASSET MANAGEMENT GROUP PLC.

One of America's major mutual fund managers, SCUDDER KEMPER INVESTMENTS, INC., has changed the name of its Japanese operation to reflect its new business direction. Effective July 1, SCUDDER STEVENS & CLARK JAPAN, INC., an investment advisory firm, became SCUDDER INVESTMENT JAPAN, INC. It applied to the Ministry of Finance for a license to market investment trusts. The company will use a variety of wholesale channels to sell its products, including banks and securities firms.

Japanese banks continue to introduce new investment vehicles developed with the help of American financial institutions and usually managed by them. For instance, SUMITOMO BANK, INC. is selling through its nationwide network a dollar- denominated commodity-type fund managed by MERRILL LYNCH & CO., INC. The securities company is guaranteeing the principal as well as a minimum annual dollar return of 2 percent on the five-year fund. Investors must put up at least $50,000. .....As another example, DAIWA BANK, LTD. and CHASE MANHATTAN CORP. codeveloped an investment trust for sale to individual and institutional investors. The top U.S. bank will invest the money in various financial instruments in the United States and Europe and guarantee initial investments on maturity of the seven-year fund. The minimum investment is about $7,100.

Specialized system software from HEWLETT-PACKARD JAPAN LTD. has enabled FUJI BANK, LTD. to offer a new service: settling foreign exchange transactions in yen for regional banks. From existing PCs, these financial institutions will be able to send the relevant information via the Internet to Fuji Bank's on-line settlement system. Regional banks will pay the big nationwide commercial bank commissions for taking this tedious job off their hands.

In a first for any state, the New York State Banking Department has opened an office in Tokyo. Its mission is to keep tabs on American financial institutions moving into Japan and other Asian countries to exploit the openings created by the region's financial turmoil and regulatory reform.

CITIBANK N.A., which sees tie-ups with regional banks as one important way to expand its business in Japan, has signed up MICHINOKU BANK, LTD. to market its financial services. The midsized bank is offering Citibank foreign currency deposit accounts and credit cards that are settled in dollars through branches in Aomori prefecture, Michinoku Bank's home base, as well as in Iwate prefecture and Hokkaido. Customers interested in Citibank's products obtain information from its marketing department via videophones installed at Michinoku Bank offices.

Another business-expansion strategy pursued by CITIBANK N.A.'s local operation is to offer services in conjunction with the postal savings system (see Japan-U.S. Business Report No. 342, March 1998, pp. 15-16). Starting in October, the Ministry of Posts and Telecommunications will issue Citibank debit cards to interested account owners. Cardholders will be able to use them at cash dispensers and automatic teller machines in 110 countries as well as at the post office's 24,000 cash machines around Japan. The tie-in with Citibank also will enable people to use the cards to pay for purchases at close to 1.8 million stores in 50 countries.

Next January, the credit-card affiliate of MYCAL CORP., Japan's fourth-largest supermarket chain, and MASTERCARD INTERNATIONAL INC. will issue what is billed as the world's first commercially available multipurpose smart card. Initially, the cards will work like credit cards, but electronic money and similar functions will be added later using the Multos electronic money operating system developed by Europe's Mondex consortium. MYCAL CARD INC. cardholders also will be able to charge up to about $360 at more than 300 Mycal Group stores without a signature.

San Francisco's EQE INTERNATIONAL INC., a specialist in earthquake risk management, has teamed with TOKIO MARINE & FIRE INSURANCE CO., LTD., Japan's top nonlife insurer, and MITSUBISHI CORP. to offer consulting and insurance in earthquake-prone Japan. Targeting companies putting up new buildings, the partners will use EQE's extensive data base and experience to calculate premiums based on the risk of earthquake damage and to advise clients on preventative design and construction methods. Tokio Marine will be in charge of the insurance side of the business, while Mitsubishi will be responsible for recruiting clients.

An exchange rate of ¥140=$1.00 was used in this report.

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Through an expenditure of $10.7 million, CARGILL INC. erected 12 freezer tanks at a site in Chiba prefecture to store frozen condensed orange juice imported from Brazil. From there, a fleet of tanker trucks will deliver juice directly to beverage producers. The new facility can store 6,600 tons of juice at one time. Cargill, the biggest importer of orange juice from Brazil, which is Japan's dominant supplier, plans to bring in about 22,000 tons of the condensed product annually.

Bottlers affiliated with COCA-COLA CO. might control the canned soda market, but their combined sales represent less than 20 percent of the total for tea in plastic bottles. To improve that standing, MINAMI KYUSHU COCA-COLA BOTTLING CO., LTD. in Yamanashi prefecture, MIKUNI COCA-COLA BOTTLING CO., LTD. in Saitama prefecture and some other group members are in the process of boosting aggregate annual capacity 150 percent or so to 25 million cases of 24 bottles each. Coke's subsidiary covered roughly two-thirds of the $71.4 million cost.

The fourth-largest U.S. beef packer has opened a wholly owned subsidiary in Tokyo. FARMLAND NATIONAL BEEF INC. of Kansas City, Missouri shipped $120 million worth of chilled beef to Japan in 1997. With an in-country presence, it hopes to double that figure this year. The new unit will take orders from trading companies, processors and other buyers and send this information back to its parent. Last December, Farmland National Beef tied up with a cattle producers' cooperative, which allows the company to respond more flexibly to customers' demands.

A third big oil company has tied up with MCDONALD'S CO. (JAPAN) LTD. in an effort to gain an edge in Japan's gas-station wars. MITSUBISHI OIL CO., LTD. expects to open 20 service centers with a drive-through McDonald's by 2000. The first one has opened in Shiraoka, Saitama prefecture. NIPPON OIL CO., LTD. and MOBIL CORP.'s subsidiary have similar deals with the fast-food operator.

An exchange rate of ¥140=$1.00 was used in this report.

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Warehouse retailing is coming to Fukuoka prefecture. COSTCO COS. INC. will open its first membership warehouse club in Japan in April 1999 in an American-style suburban shopping center now being built. Like its American counterparts, the 140,000-square-foot store will sell food, housewares, clothes, appliances and a long list of other products in bulk to members. Costco hopes to sign up 20,000 members in the first year and generate sales of between $50 million and $57.1 million. The Issaquah, Washington-headquartered company said that it also was looking for sites in the Tokyo area as well as elsewhere.

An exchange rate of ¥140=$1.00 was used in this report.

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In a move designed to strengthen its position as the world's top investment casting producer, HOWMET CORP. exercised its option to increase ownership of KOMATSU- HOWMET, LTD. to 81 percent from 50 percent. The joint venture with KOMATSU LTD. was formed in 1972, a decade after the Greenwich, Connecticut manufacturer signed a licensing agreement with Komatsu. In 1995, Komatsu-Howmet moved into a new plant in Terai, Ishikawa prefecture. It makes precision investment castings in nickel-, cobalt- and iron-based alloys for aerospace and industrial gas turbine applications. Sales in 1997 were $37.9 million. Major customers include ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD., KAWASAKI HEAVY INDUSTRIES, LTD. and MITSUBISHI HEAVY INDUSTRIES, LTD.

FEDERAL-MOGUL CORP. and DAIDO METAL CO., LTD., said to be the only bearing manufacturers able to supply a complete range of plain bearings, will establish a company in October to manufacture and sell rotating plant bearings for generators that each has developed. The Southfield, Michigan-based partner will put up 40 percent of the capital for DAIDO GRACIER RPB CO., LTD., which will operate out of Daido Metal's Nagoya headquarters. The venture is projecting revenues of $10 million in 1999. Federal-Mogul and Daido Metal announced at the same time an agreement to form a company to make and market plain bearings for nonautomotive diesel engines, using as their base the American firm's plants in England and France.

An exchange rate of ¥140=$1.00 was used in this report.

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The world leader in equipment for rapid product development, 3D SYSTEMS CORP., has tapped HITACHI ZOSEN INFORMATION SYSTEMS CORP. to sell, service and support the Actua 2100 3D printer. The Tokyo company brings considerable expertise to this job since it develops and sells CAD/CAM/CAE systems as well as rapid prototyping systems. The size of an office copier, the network-ready Actua 2100 operates as a CAD peripheral similar to a printer or a plotter. Like the Valencia, California's SLA-5000 stereolithographic rapid prototyping system for turning CAD files into solid, 3D models, the Actua 2100 is designed to help manufacturers create models quickly and cost-effectively. The SLA-5000 is distributed by INCS INC. of Kawasaki, Kanagawa prefecture.

Going up against the new pairing is another powerful team: SANDERS PROTOTYPE, INC. and TOYODA MACHINE WORKS, LTD., one of Japan's biggest machine tool builders. It is selling the Wilton, New Hampshire company's $85,700 ModelMaker II rapid prototyping system. SPI claims that its small-footprint system, which has a maximum build envelope of 12 x 6 x 9 inches, is up to 10 times more precise than competitors' products. The ModelMaker II also is said to be flexible enough to produce tooling-grade patterns ready for casting or mold making as well as concept models. Toyoda Machine Works expects to sell 13 systems in the first year of marketing and 48 over three years.

A variety of pumps from TRANSCAT INC. and the Rochester, New York company's affiliates are on the market through JAPAN-USA INSTRUMENT CO., LTD. The Kobe distributor is handling a line of hand pumps that provide pneumatic pressure up to 600 pounds per square inch, thereby eliminating the need for hydraulic fluids in this psi range. It also is marketing a hand-actuated pressure pump that generates up to 145 psi as well as two precision pressure pumps, one that generates up 100 psig (pounds per square inch gauge) and the other that produces as much as 600 psig. Several vacuum pumps are included, too. Japan-USA Instrument has forecast combined sales of 200 units. Many of the pump models are priced around $700.

New York City's TURBOCHEF, INC., a designer of high-speed cooking systems, is moving into Japan's food-service market with the help of exclusive agent KANEMATSU CORP. The trader has bought about $1 million worth of TurboChef equipment for market-development purposes. It will focus specifically on the nontraditional food-service market. Once sales begin, marketing will be handled by FOOD MACHINES INTERNATIONAL LTD., a national distributor of primarily high-end food-service equipment, and by a food-service consulting company. The TurboChef cooking system employs proprietary hardware and software technologies to "cook to order" a variety of foods at speeds said to be 10 to 15 times faster than other commercial ovens while providing superior quality.

An exchange rate of ¥140=$1.00 was used in this report.

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The rollout of new products by EASTMAN KODAK CO.'s subsidiary continues with the launch of a pair of zoom digital cameras in the Digital Science line. The CCD (charge- coupled device) sensor in the DC260 Zoom delivers a picture with a resolution of 1.6 million pixels. Its optical zoom lens also provides a threefold increase in magnification for closeup work. This product is priced at $860 versus $630 for the DC220 Zoom with a 1.09-million-pixel CCD. Both have a USB (universal serial bus) interface for fast downloading of the images to PCs.

An exchange rate of ¥140=$1.00 was used in this report.

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By next spring, the technology will be in place to authorize access to automatic teller machines and home security systems by identifying a person by his or her facial features. Developer EYEMATIC INTERFACES INC. licensed exclusive Asian rights to its verification system to OMRON CORP. The Santa Monica, California firm's system takes less than a second to verify a person's identity by checking a data base. Moreover, it works whether the person is standing still or moving. Omron expects to launch sales next April. By 2001, it is looking for annual revenues of $71.4 million.

In an international launch, TEKTRONIX, INC. released its first digital phosphor oscilloscope. Designed to help engineers debug and verify the performance of their designs by dealing with the complex signal behavior of today's electronic products, DPOs display, store and analyze signals in real time. They use three dimensions of signal information in the analysis process: amplitude, time and the distribution of amplitude over time. Analog real-time oscilloscopes also display these three dimensions, but they cannot store or analyze them. While digital storage oscilloscopes can do that, they work only with amplitude and time information. Despite these drawbacks, ARTs and DSOs are priced in the same range as Tektronix's seven DPO models, which are equipped with up to 2 gigahertz of bandwidth on four channels. In Japan, pricing runs from $10,600 to $38,400. The Wilsonville, Oregon manufacturer expects SONY TEKTRONIX CORP. to sell 3,000 of the 10,000 units it hopes to sell worldwide on an annual basis.

Troubleshooting problems on LANs and wide area networks has gotten easier thanks to a pair of Series 900 expert protocol analyzers from DIGITECH INDUSTRIES INC. For greater ease of use, the Danbury, Connecticut manufacturer's exclusive distributor, IWATSU ELECTRIC CO., LTD., has localized the products so that the analysis appears in Japanese. A PC Card-type device for LANs costs $5,800, while a PC-integrated, portable model for both LANs and WANs lists for $17,100. Iwatsu Electric expects to sell a combined total of 500 Digitech Series 900 protocol analyzers a year.

The Model 8200 SMT (surface-mount technology) inspection system made by VIEW ENGINEERING, INC. is available from distributor SHINWA CORP. Through 3D laser inspection, the system identifies solder paste printing defects and component placement errors on printed circuit boards measuring up to 10 x 16 inches. While catching problems early in the SMT process reduces rework, scrap and field-failure costs, the Model 8200 is not inexpensive at $178,600. Shinwa is eyeing sales of three systems in the first year and 30 over three years. View Engineering is a Simi Valley, California subsidiary of GENERAL SCANNING INC.

Initial-year sales of $1.4 million are being projected for a benchtop thermal tester from TEMPTRONIC CORP. The model TPO4100A ThermoStream system provides controlled temperatures for the testing of components and devices at the tester site and/or on the PCB. The user-adjustable air-flow rate produces a temperature range from zero up to 225 degrees. HAKUTO CO., LTD., the Newton, Massachusetts company's distributor, has priced the system at $16,800.

B-TREE SYSTEMS INC. has named INNOTECH CORP. to distribute its Validor SC product and to oversee all sales and support activities. The Minnetonka, Minnesota company's system allows microprocessor, chipset, motherboard and PC manufacturers to test and verify the compatibility of their products with existing PC software, including operating systems, application programs and games. Innotech has priced Validor SC between $21,400 and $35,700.

Clinical studies have been completed of the transmyocardial revascularization procedure using the Heart Laser System from PLC SYSTEMS, INC. of Franklin, Massachusetts. This surgical process is designed for patients with chronic, severe coronary artery disease who have no other treatment alternatives. The company's exclusive distributor, the local subsidiary of IMATRON INC. of South San Francisco, California, managed and funded the clinical trials. It will apply shortly to the Ministry of Health and Welfare for marketing approval.

In the first such product approval, MHW has cleared for sale MATRITECH, INC.'s NMP22 test kit for monitoring as well as for testing people at high risk for bladder cancer. The test is based on the Newton, Massachusetts company's proprietary nuclear matrix protein technology, which correlates levels of NMPs in body fluids to the presence of cancer. KONICA CORP. is distributing the test.

Through a recently established subsidiary in Tokyo, COLLAGEN CORP. of Palo Alto, California has launched direct sales to physicians of its Zyderm and Zyplast injectable collagen implants for the treatment of wrinkles and scars. For the last 13 years, LEDERLE JAPAN LTD., a unit of AMERICAN CYANAMID CO., has handled sales of Collagen's aesthetic product line, building it into a $12-million-a-year business.

Mail-order sales of JOHNSON & JOHNSON's disposable contact lenses have started. Covered by the new service are one-week Acuvue, two-week Surevue and One-Day Acuvue. Customers can order up to a three-month supply at one time. Disposable lenses now represent about 30 percent of Japan's contact lens market. J&J is the dominant player in the disposable lens business with 70 percent of sales.

An exchange rate of ¥140=$1.00 was used in this report.

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TEXAS INSTRUMENTS INC.'s decision to exit the volatile DRAM business and sell this part of its semiconductor operations to MICRON TECHNOLOGY INC. has collateral repercussions for KTI SEMICONDUCTOR, LTD., the eight-year-old Nishiwaki, Hyogo prefecture joint venture between KOBE STEEL, LTD. and TI. Boise, Idaho-based Micron Technology is taking over TI's 25 percent stake in the company, which lost $92.9 million in FY 1996 and $136.4 million in FY 1997. The new American partner and Kobe Steel expect to spend roughly $285.7 million over the next two years to convert the wafer fabrication facility to Micron Technology's production processes and to start making 64-megabit DRAM wafers next spring. Close to $430 million already has been invested in KTI, most recently in 1996 to expand capacity, switch to 8-inch wafers and launch current production of 16-megabit DRAM. All of the plant's wafers will go to Micron Technology, just as they did when TI was a part owner. KTI hopes to return to profitability in FY 1999, but analysts are divided on whether that is possible without a strong rebound in DRAM pricing.

Hoping that beating INTEL CORP. to the market will provide a windfall, ADVANCED MICRO DEVICES, INC. has released an alternative to the microprocessor king's delayed Pentium II processor with MMX2 technology. AMD's subsidiary is shipping three speeds of its competing K6-2 processor with 3D Now! technology. In quantities of 1,000, the 333-MHz version costs $395, while a 300-MHz processor lists for $300 and a 266-MHz K6-2 goes for $200. If history is any guide, these prices are likely to undercut those for the Pentium II with MMX2 technology by about 25 percent. The three versions of the K6-2 with 3DNow! technology are targeted at the low end of the desktop PC market as well as at what in the United States is called the sub-$1,000 market. The Intel part is expected to ship in 1999.

The first embedded processor is available at 300 MHz for networking and embedded customers that require high-speed capabilities from a low-cost, low-power engine. MOTOROLA INC.'s subsidiary is marketing the 300-MHz EC603e at a suggested price of $106 in quantities of 10,000 units. The EC603e, which also comes in 266-, 233-, 200-, 166-, 133- and 100-MHz versions, is a 32-bit implementation of the PowerPC RISC architecture. At 300 MHz, it performs 423 million instructions per second while drawing just 4 watts of power.

OKI ELECTRIC INDUSTRY CO., LTD. has joined a number of other Japanese semiconductor manufacturers in licensing DSP GROUP INC.'s second-generation core-based digital signal processor. The Santa Clara, California company's OakDSPCore is a 16-bit general-purpose, low-power, low-voltage, high-speed DSP core that can be used to develop custom multimedia and communications applications.

A process developed by PACIFIC MICROSONICS INC. of Berkeley, California that delivers superior sound playback from CDs has been licensed to SANYO ELECTRIC CO., LTD. It plans to produce in volume a chip that integrates all three functions necessary for High Definition Compatible Digital playback. By holding down production costs, Sanyo Electric hopes to make the HDCD chip standard on CD players.

In the fourth quarter, the semiconductor systems unit of ROCKWELL INTERNATIONAL CORP.'s subsidiary will begin sampling a chipset for ADSL (asymmetrical digital subscriber line) equipment at $68 per unit in lots of 10,000. Volume production is scheduled for early 1999. ADSL technology enables fast Internet connections over existing copper telephone lines. Rockwell's chipset gives ADSL equipment the ability to transmit as much as 8 megabits of data per second downstream and 1 megabit per second upstream. It also conforms to what is expected to become the international standard for ADSL equipment power consumption, a low 1.9 watts during transmission.

As part of a worldwide launch, VLSI TECHNOLOGY, INC.'s local operation is shipping to companies developing mobile phones based on the CDMA digital platform samples of a single-chip CDMA dual-core baseband solution. Claimed to be the market's most highly integrated CDMA product, the San Jose, California company's CDMA+ package includes the low-cost, low-power-consumption CDMA+ Processor 100 chip, software and debug tools. CDMA+ is the third product built on VLSI's ViA Standard Communications Platform. Volume production of the part is expected in the first quarter of 1999.

In a pair of deals that could lead to a significant increase in sales, INTEGRATED SENSOR SOLUTIONS, INC. is shipping ASICs (application-specific integrated circuits) to NAGANO KEIKI CO., LTD., a supplier of sensor and data acquisition systems. One contract covers a low-power, signal-conditioning ASIC developed for the Tokyo company, which has been selected by major gas meter manufacturers to provide sensor subassemblies for next-generation residential propane gas meters. Nagano Keiki is using the ASIC in a pressure sensor designed to monitor line pressure as well as to detect fine gas leaks. ISS's other contract involves its SCA2095, a single-chip, signal-conditioning ASIC. The Japanese customer is integrating this part with resistive bridge sensors for gasoline direct-injection engines that MITSUBISHI MOTORS CORP. is developing (see Japan-U.S. Business Report No. 345, June 1998, pp. 7-8).

BURR-BROWN CORP.'s subsidiary has added two sampling analog-to-digital converters to its product lineup. Its ADS7841 is a four-channel, 12-bit product with a synchronous serial interface. With its low power, high speed (a sampling rate of 200 kilohertz) and on-board multiplexer, the ADS7841 is targeted at such applications as industrial process control, remote data acquisition, test and measurement, medical instrumentation and battery-operated systems like personal digital assistants. It is priced from $7.70 in quantities of 100. The Tucson, Arizona company's ADS7818 is said to be the industry's fastest 12-bit ADC. It also has a very low power dissipation and comes in a small package. High-speed applications where board space and power consumption are at a premium are the target uses, including battery-operated systems and wireless communications devices. The pricing of the ADS7818 begins at $8.90, also in 100-unit lots.

What is said to be the first application-specific power chipset to exceed INTEL CORP.'s Mobile Power Guideline 1999 standard for notebook PC power supplies is available on a sampling basis from INTERNATIONAL RECTIFIER CORP.'s subsidiary. The El Segundo, California manufacturer's low-voltage HEXFET power MOSFETs (metal- oxide semiconductor field-effect transistors), sold as the IRF7805 and the IRF7807, reportedly reduce losses by 20 percent in Pentium II processor DC/DC converters and improve overall notebook power supply efficiency to 92 percent. Volume production of both chipsets is expected in August. They are priced at just over $1.00 each.

Manufacturers of traffic signal heads now have a power-saving alternative to conventional incandescent lamps. HEWLETT-PACKARD JAPAN LTD. is marketing its parent's new line of high-intensity, high-efficiency bluish-green LED (light-emitting diode) lamps. HEWLETT-PACKARD CO. already is the world's biggest supplier of high-brightness red and yellow LED lamps for traffic signals. The "traffic-signal green" lamps, marketed as the HLMP-CExx, are available in a range of luminous intensities and in two different viewing angles. HP Japan also is offering the HLMP-CMxx line, which consists of "pure green" and blue lamps, for general applications, including outdoor signs. Sample prices of both families start at $1.00 each in quantity. HP Japan expects to sell 2 million of all the new lamps monthly.

With wafer yield improvement a constant challenge in semiconductor production as device geometries become smaller and smaller, APPLIED MATERIALS, INC. believes that it will find a strong market in Japan for its recently introduced high-speed defect- review scanning electronic microscope system. The $2.3 million SEMVision DR-SEM is described as the first fully automated defect review and classification SEM specifically designed for in-line operation on state-of-the-art production lines. It is said to be five to 10 times faster than existing off-line, manual SEMs, providing defect classification at a throughput of up to 300 defects an hour.

An exchange rate of ¥140=$1.00 was used in this report.

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Hoping to capitalize on Big Bang financial market changes and growing interest in all- things-Internet, ETRADE GROUP, INC. and SOFTBANK CORP. have launched a company to offer on-line investment services, including stock trading. The Palo Alto, California firm will attempt to replicate in Japan its successful U.S. electronic investment system by providing its cutting-edge technology and consumer-friendly products and services. It owns 42 percent of the joint venture, which expects to begin full-scale operations in 1999 once brokerage commission fees are fully liberalized. Discount trading fees are one of ETRADE's hallmarks. Softbank, which put some venture capital into ETRADE, will help with tailoring services and products for local tastes.

PANDESIC LLC of Sunnyvale, California has opened a wholly owned subsidiary to pursue the electronic commerce services market. The joint venture between INTEL CORP. and SAP AMERICA, INC. will be a one-stop shop for doing business over the Internet, providing EC-related hardware and software as well as consulting services, primarily to midsized and and small businesses. It is relying on five marketing partners, including NIPPON TELEGRAPH AND TELEPHONE CORP. and YAMATO TRANSPORT CO., LTD., to line up customers and help with systems integration.

Through its local arm, COMPAQ COMPUTER CORP. has begun offering Internet- based electronic data interchange services to wholesalers and retailers interested in improving their generally lagging efficiency. Combining software that adheres to the Ministry of International Trade and Industry's JEDICOS standard for EDI in the distribution sector with its ProLiant line of PC servers running Windows NT, the Compaq system has been tested successfully by Japan's largest supermarket chain operator, DAIEI, INC. Data and transmission security is based on the Secure Sockets Layer technology, which is standard in most current Web browsers.

In its second recent contract win from a big Japanese bank, VERISIGN, INC. has provided digital identification certification for YASUDA TRUST & BANKING CO., LTD.'s planned on-line banking services. VeriSign's Global Server ID system uses a 128-bit key, providing the very high level of security that Yasuda Trust officials want for their Web site. The Mountain View, California company also will secure SUMITOMO BANK, LTD.'s on-line financial services through its OnSite public key infrastructure system and safeguard the bank's network communications with 128-bit Global Server IDs (see Japan-U.S. Business Report No. 345, June 1998, pp. 17-18).

Another company whose products and technology provide security for electronic interactions through digital certificates has moved into the market. Dallas-based ENTRUST TECHNOLOGIES INC. signed an exclusive distribution agreement with SECOM CO., LTD., Japan's top security services firm. SECOM INFORMATION SYSTEMS CO., LTD. will work with its parent to sell and deploy Entrust software, which, among other uses, allows companies to identify employees on-line. That will be a primary market target. Secom is projecting sales of $7.1 million in FY 1998 and $71.4 million over the following three years.

An updated Web page/site editor from SYMANTEC CORP.'s subsidiary gives nonspecialized users access to some of the latest, cutting-edge Web technologies. They include cascading-style sheets, automatic link-checking, sitewide search and replace, and easy integration with Java applets. Visual Page 2.0 comes bundled with a large graphics and image library for just $120.

Also in the software update category is INTERLEAF, INC.'s Xtreme document-to-Web conversion system. The Waltham, Massachusetts firm's subsidiary debuted Xtreme late last year (see Japan-U.S. Business Report No. 339, December 1997, p. 18) and now has released version 1.1.1, which is fully Java-savvy and offers more interactive capabilities. A 10-user license costs roughly $3,600, while a 100-user package lists for $20,700.

A pair of Internet/intranet servers from MICROSOFT CORP.'s local organization promise greater power, flexibility and ease of use. Microsoft Site Server 3.0, which costs $1,400 and up, offers a richer variety of tools to manage and mine corporate information. Microsoft Site Server Commerce Edition is a turnkey electronic commerce server that is easily customizable and integrates simply with third-party applications. Its pricing starts at $6,300.

San Jose, California-based BACKWEB TECHNOLOGIES INC. has rolled out a new version of its push-type information distribution system, BackWeb Infocenter. Version 4.0, available through a KANEMATSU CORP. affiliate, combines automatic knowledge gathering, automatic data filtering and organizing, and automatic just-in-time delivery. BackWeb and its distributor hope to install the $14,100 software on 150 servers this year. BackWeb first brought its push technology to Japan last September.

Information push software from LOTUS DEVELOPMENT CORP.'s subsidiary is finely tuned to the needs of the financial industry. Starting at $12,900, Lotus Notes Ticker r1.0 provides price data in real time to Notes clients using individualized information filters and display formats.

Demonstrating that the line between the Web and the corporation is blurring, two Internet application server packages give companies the tools to make their existing programs Internet-savvy as well as to develop, deploy and manage Net-centric business processes. Netscape Application Server Business Edition 2/JA from NETSCAPE COMMUNICATIONS CORP.'s subsidiary comes in a basic edition for $13,600, plus Windows NT and Unix flavors for $26,800 and $37,500, respectively. Netscape and development/marketing partner FUJITSU, LTD. expect NAS sales to hit $185.7 million by FY 2000. .....Through its subsidiary, WALL DATA INC. is offering the Cyberprise 6 series, including server ($28,600), host ($715), data, tools and channels modules. The Kirkland, Washington developer expects sales of Cyberprise software and consulting services to rise sharply as it moves toward localized versions. That explains the boost in its subsidiary's capitalization to $2.8 million from just $71,400.

With the help of NEC CORP. and SOFTBOAT INC., Bellevue, Washington-based SUPERCEDE, INC. has localized its namesake Java-based business application development tool. SuperCede, a recent spin-off from ASYMETRIC CORP., hopes SuperCede 2.0J will appeal to firms with significant Unix legacy resources and Windows NT front ends because of its many tools to link and integrate these disparate environments. The Java development package comes as a $90 standard version and as a professional version for $1,400. SuperCede and its partners expect revenues to hit $3.1 million the first year based on a sales volume of 80,000 copies.

A host of industrial-strength Internet communications applications have come on the market targeted at large-scale users and Internet service providers. NETWORK COMPUTER, INC., for one, made a big splash in introducing AnyISP, a package that includes all the software to create and roll out Enhanced TV services. The Redwood Shores, California affiliate of ORACLE CORP. signed up as customers four big cable TV operators and ISPs: CROSSBEAM NETWORKS CORP., a SUMITOMO CORP. company, DDI CORP., DREAM TRAIN INTERNET CORP., a subsidiary of MITSUBISHI ELECTRIC CORP., and MARUBENI CORP. affiliate INTERACTIVE CABLE AND COMMUNICATIONS CORP. The companies hope that AnyISP's ability to track user preferences and affinities will give them an edge in an increasingly competitive market when they launch new Internet-based services for their 13 million combined subscribers later this year.

With the close cooperation of ITOCHU TECHNO-SCIENCE CORP., Mountain View, California-based RESONATE, INC. has brought out a Japanese version of Dispatch Central, its flagship product for managing and optimizing the performance of multiple- server Web sites. The family of modules, which begin at $17,700, helps large-scale Internet sites speed the flow of information with the scalability to handle demand peaks.

Software from INKTOMI CORP. is designed to improve the response times of Web sites by caching frequently requested or popular Web pages. The San Mateo, California firm's Traffic Server claims "hit" rates on cached pages of as high as 50 percent in real-life applications. The Web site performance enhancer is available locally through ITOCHU TECHNO-SCIENCE CORP., which also is providing after- sales support.

Carrier-scale Internet messaging services is what SOFTWARE.COM, INC.'s InterMail family of products provides at a comparatively reasonable cost. With more than 10 million of its e-mail boxes installed, the Santa Barbara, California firm is hyping InterMail's scalability, reliability and availability to local ISPs and other operators of large-scale network services.

As the variety and the levels of services provided by Internet access firms grow, so does the need for sophisticated billing software. PORTAL SOFTWARE, INC. and NTT SOFTWARE CORP. are working to fulfill this need by localizing the Cupertino, California firm's Infranet package. Billed as "real-time, no-limits," Infranet integrates the management of core ISP business operations, including registering, tracking, supporting and billing service subscribers.

A competing package is available from USCS INTERNATIONAL, INC.'s wholly owned subsidiary, CABLEDATA INC., and business partner BILLINGSOFT JAPAN LTD. The Rancho Cordova, California firm's Intelecable manages customer relations and billing for combined CATV and other services. Local customers include TITUS COMMUNICATIONS CORP. (a 40 percent/60 percent unit of TELE-COMMUNICA- TIONS, INC. and SUMITOMO CORP.) and JUPITER TELECOMMUNICATIONS CO., LTD. (an equally owned venture of TIME WARNER INC., US WEST INC., ITOCHU CORP. and TOSHIBA CORP.). Both companies currently offer cable TV and telephony services, but they want to add cable modem, Internet access and other interactive services.

Buyers seeking SUN MICROSYSTEMS, INC.'s Solaris operating system have another local source. NTT SOFTWARE CORP. recently signed on as a reseller and integrator of Sun's version of Unix and its associated family of support modules.

IBM JAPAN LTD. has released a version of the venerable DOS operating system that solves Year 2000 issues. PC DOS 2000, which costs $70, is based on PC DOS Version 7 but adds such features as Y2K enabling, century rollover, more application memory, load device drivers without rebooting, antivirus protection, file synchronizer for PDAs and PCMCIA support for PC Cards.

Software and electronic game companies have a new option to protect their products from unauthorized reproduction. DiscGuard and DiscAudit from New York City's TTR, INC. authenticates and protects such optical media as CD-ROMs and DVDs from casual and professional illegal replication. Distributor EAGLE INTERNATIONAL CO., LTD. of Tokyo predicts a big market in Japan for TTR's products since the Software Publishers Association estimates that as much as two-thirds of all software used in Japan is bootlegged.

EMC CORP. has a remedy for overburdened networks. The Hopkinton, Massachusetts firm's InfoMover 2.0 handles bulk file transfers between mainframe and Unix-based systems using the Symmetrix Enterprise Storage System's I/O channels, removing such traffic from the regular network. With a price tag starting at $42,900, InfoMover helps large companies collect and centralize information from a wide range of heterogeneous sources, enabling real-time data warehousing and enterprise resource planning applications.

Another approach to managing network traffic — service-level prioritization — is available from UKIAH SOFTWARE, INC. and distributor NETSERVE INC. The Campbell, California firm has developed three modules that automatically categorize data packets according to policy guidelines, allocating more resources to those data streams with higher priority. NetRoad TrafficWARE Gateway manages the bandwidth at the WAN access point, NetRoad TrafficWARE Monitor lets administrators watch and profile network activity and, the newest module, NetRoad TrafficWARE for NT Applications Servers, decides how best to use these increasingly important resources. NetServe is projecting sales of 300 NetRoad TrafficWARE modules in the first year.

A third approach to allocating distributed computing resources efficiently comes from IBM JAPAN LTD. courtesy of a recent acquisition by its parent. Following the purchase of UNISON SOFTWARE, INC. of Santa Clara, California, INTERNATIONAL BUSINESS MACHINES CORP. subsidiary TIVOLI SYSTEMS INC. incorporated Unison's Maestro workload-management package into its TME 10 enterprise system management family. That configuration costs $37,600 and up. It also combined Maestro with its TME 10 OPC host job-scheduling module, which lists for $25,900. IBM Japan now can offer one-stop shopping to customers that want an integrated job- scheduling solution from desktop to data center.

The Version 6 update of HP OpenView Network Node Manager now is tightly integrated with HP OpenView NetMetrix 6.0, providing both network monitoring and performance/availability management in one package. Node Manager 6.0 offers out- of-the-box reports, data warehousing, ready-to-go event correlation technology, a Java-based interface and increased scalability and reliability. NetMetrix 6.0 includes a comprehensive set of network management tools, extensive performance monitoring, analysis and reporting for the entire network, and expanded network health and performance reporting. HEWLETT-PACKARD JAPAN LTD. has priced the package from just $8,700.

NOVELL INC.'s subsidiary has brought out a new, localized version of the ManageWise, an integrated set of network management services. ManageWise 2.5J lets users monitor and control heterogeneous networks in their native language, including print queues, NetWare servers and SNMP devices. The package also automatically generates a list of network devices and inventories the hard disk contents of each node and server. Pricing is open.

To ease the task of installing and updating the operating systems and applications of client machines, Japanese network administrators can turn to LANDesk Configuration Manager 1.5J from PLATINUM TECHNOLOGY, INC. of Oakbrook Terrace, Illinois. Available from ASSIST CO., LTD., the localized network tool installs administrator- defined desktops via the network and handles everything from full-fledged PCs to network computers and "dumb" terminals.

For administrators of academic and teaching computer networks, client control software from SMARTSTUFF DEVELOPMENT CORP. ensures the integrity of key files. FoolProof, available in Japanese for Windows 95 and Mac OS computers, allows an administrator to bar users from accessing critical files, commands and system parameters without compromising their freedom to explore and experiment with the client computer. The Mac OS version also lets an administrator customize pull-down and other menus as well as control client access to the Internet. Distributor QUALITY CO., LTD. of Tokyo has set license pricing at $575 for five seats and $1,100 for 10 seats.

Following the opening of its subsidiary (see Japan-U.S. Business Report No. 343, April 1998, p. 19), Ft. Lauderdale, Florida CYBERGUARD CORP. has fulfilled its pledge to market a version of its FireWall network security software for Windows NT systems. Distributor NISSHIN ELECTRIC CO., LTD. has started CyberGuard FireWall pricing at $1,900.

SecureVIEW from Norcross, Georgia-based SECUREIT, INC. gives network security staff a sophisticated tool to access, analyze and report on log-file data generated by Check Point FireWall-1 systems. A wholly owned subsidiary of VERISIGN, INC., SecureIT has lined up HITACHI INFORMATION NETWORK, LTD. to handle marketing. The partners expect to sell 3,000 copies of SecureVIEW over the next three years. Prices start at $2,400.

NETWORK ASSOCIATES, INC. hopes its Total Virus Defense suite will sweep Japan as it did in the United States. A single, centrally managed package, TVD provides comprehensive enterprisewide security against viruses at all potential points of entry to the network. TVD is available in Japanese as a stand-alone product or as part of the Santa Clara, California firm's Net Tools Secure comprehensive site security package.

IBM JAPAN LTD. has ported its FaxDirector family of network facsimile tools to the Windows NT operating system. Starting at $1,300, the FaxDirector line includes modules for PC and midrange servers, client software, image and photo transmission add-ons and printing utilities.

The growing momentum behind the Linux freeware operating system is beginning to reach Japan's shores. In cooperation with distributor RIOS CORP., Scotts Valley, California INTERBASE SOFTWARE CORP. has localized its namesake relational data base management system for Linux. InterBase 4.0 uses Java-based clients, versioning architecture to handle both on-line transaction processing and strategic decisionmaking queries, and a rich variety of data types and interface hooks to offer a product that is easy to install, customize, use and maintain.

To keep up with the competition, RED BRICK SYSTEMS, INC. has updated its data warehouse package for both Unix and Windows NT systems. Red Brick Warehouse v5.1 offers faster performance, more varied data types, greater automatic features and Internet connectivity. The Unix version goes for $85,700 and up, while the one for Windows NT starts at $8,600.

Minneapolis-headquartered LSC, INC. signed up FUJITSU, LTD. to distribute and support its Storage and File Manager-File System. SAM-FS automates the collection, organization, storage and access of corporate data using both on-line and near-line storage devices. It also provides data security through automatic backup, is highly scalable, and ensures fast and continuous user access to information. Fujitsu expects to install 40 SAM-FS systems over the next three years at prices starting at $17,100.

The local unit of Burlington, Massachusetts-based PC DOCS, INC. has released the latest version of the DOCSFusion product line. DOCSFusion has been fine-tuned to act as a server-based document management engine. Web-based clients can access DOCSFusion with CyberDOCS, while Windows clients use PowerDOCS. DOCSFusion Routing is the nerve center for mixed hardware environments based on DOCSFusion's document-centric workflow model. PC DOCS also offers a package integrating DOCSFusion with Fulcrum Knowledge Network, an information retrieval program from FULCRUM TECHNOLOGIES INC. PC DOCS expects its new stable of products, which start at $6,800 for a single server/five-client license, to generate sales of $35.7 million over three years.

BAAN CO.'s subsidiary has jumped into the thick of the enterprise resource planning fray by introducing a new version of its ERP package. Baan IVc for MICROSOFT CORP.'s BackOffice puts a more accessible and manageable interface on the complex subject of ERP, offering greater flexibility and simpler administration. Baan IVc's tight focus on manufacturing operations is both a strength and a weakness, depending on whether or not a customer is in this line of business. The Menlo Park, California company hopes to install Baan IVc at 500 sites.

Another competitor that wants a piece of the ERP market is IBM JAPAN LTD. It has released a start-to-finish ERP service package for small businesses. As part of ERP Solution, the company provides "business transformation, re-engineering, implementation, education and training." IBM Japan's package is built around ERP software from PEOPLESOFT, INC. It retails at $53,600 for a single-seat package, $71,400 for a 10-seat license and $107,100 for a 50-seat deal.

A workflow planning module for its popular Oracle8 relational data base is now available from ORACLE CORP.'s local operation. Workflow Cartridge 2.0.3 lets Oracle8 users track and monitor business and manufacturing processes from a project-oriented standpoint. A license for the add-on costs $3,400 for eight concurrent users, plus $430 for each additional seat.

To boost the level of automated service provided by telephone call centers, NUANCE COMMUNICATIONS is offering the latest version of its natural language speech recognition software, Nuance 6 for Japanese. The software comes with a developer's toolkit to create speech-enabled applications. This task will be simplified further when Nuance Communications releases a library of reusable components called Speech- Objects. Distribution and support are being handled by OMRON CORP., which chose to link up with the Menlo Park, California company after benchmarking several industrial-strength speech recognition packages. Omron is projecting sales of 20 copies of Nuance 6 for Japanese, which is said to be 95 percent accurate in recognizing numbers, words and simple phrases spoken over the phone. Pricing begins at $35,700.

AURUM SOFTWARE INC. has lined up another distributor beside TRANS COSMOS INC. (see Japan-U.S. Business Report No. 339, December 1997, p. 20). HITACHI, LTD. will carry, integrate and support the entire line of Aurum SFA (sales force automation) packages. It expects to win 3,000 orders for the Santa Clara, California firm's products over the next three years.

SFA software tailored to the particular needs of sales agents in the field is being offered by CLARIFY INC.'s Japanese organization. ClearSales 6.0 includes integrated, mobile data synchronization capabilities and supports the popular Target Account Selling methodology. Starting at $42,900, ClearSales 6.0 gathers data from records, Web site visits and other sources to help sales agents focus in on the most promising leads. It tailors the sales pitch to each customer based on past buying habits and other data. It also pulls up data that might impact on a client's needs, such as production or delivery problems with a particular product.

Japan's banks are looking for help to meet the challenge of financial market deregulation. The SunGard Asset Management Systems unit of SUNGARD DATA SYSTEMS INC. sold YASUDA TRUST & BANKING CO., LTD. on deploying its software to manage the trust bank's worldwide custody business. The Malvern, Pennsylvania firm's Global Plus package is an integrated, multicurrency, accrual- based asset accounting and management system. Yasuda Trust is the first Japanese bank to chose Global Plus for headquarters, but five Japanese banks use it in their U.S. operations (see Japan-U.S. Business Report No. 341, February 1998, p. 8). SunGard has had a local presence for more than five years. In February, it opened a new office in Tokyo.

INTUIT INC.'s unit has been working closely with NTT DATA CORP. on GARBOS-Win, a financial accounting and management program tailored for Japan's corporate market. Although it offers locally many of the personal financial management programs for which it is known in the United States, the Mountain View, California firm has been trying to penetrate the business accounting software market in Japan. The country's economic problems have spurred companies to get a tighter grip on their finances, a task GARBOS-Win is designed to handle. With prices starting at just $3,000 for a basic system, the partners expect to sell 1,000 copies the first year.

Picture Publisher 8 from Richardson, Texas-based MICROGRAFX, INC. helps Web page authors refine and edit images. Despite its commercial-grade capabilities, Picture Publisher 8's interface is designed for nonexpert users. Web Wizards, automated bevel and other tools, sophisticated lighting effects and support for animated GIFs are just some of the professional effects that the program can generate. Micrografx's subsidiary has priced the software at $250.

A digital image editing package from IBM JAPAN LTD. focuses on the budding digital camera market. The $89 Digital Camera Perfect not only lets users compensate for common camera errors, but it provides a full range of image editing tools as well.

AVID TECHNOLOGY, INC. continues to roll out nonlinear video editing products tailored for the local market. Besides being fully Japanese language-native, the Tewksbury, Massachusetts firm's video editor — the $6,100 MCX-NT 100P — and its Japanese title maker — the $20,000 MCX-NT 2000RT — offer state-of-the-art editing and special effects tools. Avid Technology's subsidiary has set a first-year sales goal of 500 units for each program.

Hoping to keep its QuickTime digital movie and music format at the top of a fast- changing market, APPLE COMPUTER INC.'s affiliate has released a new version of the program that is fully localized. QuickTime 3/J features better playback, smaller file sizes and a richer tool set. Apple is offering the upgrade gratis to both Mac OS and Windows users. A professional version can be downloaded for $29.99 from Apple's Web site. A complete Web video authoring kit is available for around $410.

High-end movie authors, multimedia DVD-ROM developers and training program creators now can take advantage of SPRUCE TECHNOLOGIES, INC.'s DVDMaestro 1.0. One of the first DVD authoring programs for Windows NT systems, DVDMaestro breaks the creation process down into chapters and presents options via simple menus. Sales and support for the Cupertino, California company's product is being provided by JAPAN INFORMATION PROCESSING SERVICE CO., LTD.

IBM JAPAN LTD. and OLYMPUS OPTICAL CO., LTD. have codeveloped a Japanese speech-to-text application, Voice-Trek VT1000RV. Olympus is marketing the $450 package, which combines one of its minirecorders with IBM Japan's ViaVoice Transcription software. Speech is recorded on a flash memory card. Inserted in a PC, the data then is analyzed by ViaVoice. The partners claim that the software can accurately convert more than 90 percent of normal-speed recordings into text. IBM Japan and Olympus already have begun their next project, combining ViaVoice Transcription with JUSTSYSTEM CORP.'s Ichitaro Lite word-processing software to allow notebook computer users to compose and enter text orally.

Three utilities from SYMANTEC CORP.'s subsidiary are designed to help laptop computer users work more efficiently away from the office. Symantec Mobile Update, which costs $5,900 for a 100-user license, automatically sends new versions of key files to users in the field via e-mail when it detects changes in the original copies stored on servers or on the user's desktop machine. The $70 Norton Mobile Essentials, coming in September, prepares a laptop for work away from the corporate network by checking modem performance, modem settings, file transfer settings and other connection parameters, changing them as needed based on the user's travel itinerary. Besides handling simple things like out-of-state area codes, the program also knows about telephone standards in foreign countries. And WinFax PRO offers faster and easier facsimile services directly from a user's laptop or desktop computer. The company expects to license 70,000 people to use Symantec Mobile Update in the first year and to sell 20,000 copies of Norton Mobile Essentials.

The market for PDA software is bustling. From San Jose, California-based PUMA TECHNOLOGY, INC. comes the Intellisync family of file synchronization programs. Japanese users of PalmPilot, Windows CE and Wintel laptops can buy localized versions of Intellisync directly from the company's new, wholly owned subsidiary for $91 to $115, depending on the product.

To boost sales of its relational data base for embedding in PDAs, Seattle's RAIMA CORP. has lined up GDL CORP. of Tokyo as its distributor. RDM for Windows CE is designed to link with corporate data servers as well as handle information such as EDI and electronic commerce data. The two firms are exploring the possibility of forming a joint venture this fall to further support sales efforts.

With Web, car and personal navigation systems taking off in Japan, AUTODESK INC.'s local operation has rolled out AutoCAD Map Release 3. The new version works with AutoCAD r14 to give users a powerful toolset for creating geographic information systems. Not only can AutoCAD maps be very detailed and easily updated, but they can be interactive and "smart," warning users of traffic problems and other developments. A full version of AutoCAD Map Release 3 retails for $5,700, but an upgrade from previous versions goes for $1,400.

With chip designers running headlong into the so-called interconnect barrier (where integrated circuit densities are so great that current design tools no longer can predict performance accurately), FREQUENCY TECHNOLOGY, INC. expects to find a strong market in Japan for its True 3D Technology. The San Jose, California company has picked as its exclusive representative SEIKO INSTRUMENTS, INC., which also is in the electronic design automation business. The EDA software is designed to analyze deep-submicron features. Seiko Instruments also has rights to all future Frequency Technology design tools and services.

Through its subsidiary, CADENCE DESIGN SYSTEMS, INC. is offering the Advanced Packaging Ensemble, a family of modules aimed at solving IC package layout problems. Besides handling the usual discrete and IC components, APE can deal with multichip modules and other dense designs. Cadence expects to sell 30 copies of APE a year. Pricing begins at $71,400.

To help INTERNATIONAL DIGITAL COMMUNICATIONS, INC. manage its diverse, nationwide telecommunications network, TCSI CORP. used its SolutionCore telecommunications application development platform to create a Transmission and Radio Integrated Management system. The Alameda, California company's TRIM package lets IDC engineers monitor a network of more than 100 elements in real time from seven sites, pinpointing problems and allowing solutions to be implemented immediately. Each of the seven sites can monitor any other site's network elements. Moreover, the entire network can be controlled from either IDC's Tokyo or Yokohama location. IDC officials not only are impressed with TRIM's performance but with TCSI's on-time, on-budget delivery. The project was a multimillion-dollar job.

An exchange rate of ¥140=$1.00 was used in this report.

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To ensure that it remains ahead of the pack in wireless systems, MOTOROLA INC.'s Cellular Infrastructure Group is building a state-of-the-art R&D complex in Tokyo. The center's immediate job will be to develop systems and software for the trial starting next year in the capital of IMT-2000 systems, the third generation of wireless communications. Based on CDMA technology, these products will offer numerous advanced features, including global roaming. Engineering specialists at the facility will collaborate with other members of Motorola's so-called 3G team around the world. They also will work with the company's two local cdmaOne customers, DDI CORP. and NIPPON IDOU TSUSHIN CORP. (known as IDO), to ready them for the new era of competition.

Seven months after Bell Laboratories opened a facility in Kanagawa prefecture to develop and test a prototype wideband CDMA system for third-generation wireless communications (see Japan-U.S. Business Report No. 339, December 1997, p. 22), LUCENT TECHNOLOGIES INC.'s R&D arm said that it would set up a new organization in Chiba prefecture to develop prototypes for next-generation passive optical networking systems. PON technology, which uses lasers to carry communications signals over optical-fiber networks, is seen as key to delivering videoconferencing and other high-bandwidth, multimedia applications to customers. To staff the PON facility in Makuhari, Bell Labs plans to hire between 30 and 60 experts over the next two to three years.

News of this move followed the announcement that NIPPON TELEGRAPH AND TELEPHONE CORP. had selected LUCENT TECHNOLOGIES INC. to provide PON technology for its Pi-PON system. This "fiber-to-the-curb" initiative will replace copper cables throughout most of NTT's subscriber system with an optical-fiber infrastructure so that video, high-speed Internet access and other high-bandwidth applications can be brought to homes. Lucent will supply optical network units that will be installed near or in homes as well as optical line terminals that will be located at NTT's central offices. The value of the contract was not disclosed. NTT expects to have a nationwide end-to-end multimedia optical-fiber network in place by 2010.

In another key win for LUCENT TECHNOLOGIES INC., it supplied to NIPPON TELEGRAPH AND TELEPHONE CORP. the WaveStar ADM 16/1 high-capacity optical networking transmission system as well as associated ITM-SC network management technology. Already deployed on NTT's long-distance backbone network serving Tokyo, Nagoya and Osaka, the WaveStar ADM 16/1 will help the communications giant cost-effectively meet the expanding demand for high-speed data, advanced voice and video services. NTT is the first communications carrier in Japan to use the WaveStar ADM 16/1, Lucent's flagship optical networking transmission product. The value of the multiyear contract was not revealed.

People outside the area served by an ISP will be able to access the Internet for just the cost of a local telephone call thanks to the Tigris carrier-class access server that ADVANCED COMPUTER COMMUNICATIONS INC. recently sold to NIHON TELENET CO., LTD. The Suita, Osaka prefecture company plans to establish 50 access points around the country this year, including the first one already set up in Tokyo. ISPs will be charged about $145 a month per access line. NEWBRIDGE NETWORKS LTD. represented Santa Barbara, California-based ACC in this deal (see Japan-U.S. Business Report No. 344, May 1998, p. 23).

Start-up ARROWPOINT COMMUNICATIONS, which has developed a new class of products known as content-smart switches for the Internet, tapped NET ONE SYSTEMS CO., LTD. to move into the Japanese market. The Westford, Massachusetts company's CS-100 and CS-800 devices switch Web traffic based on content information in the URL while maintaining wire-speed performance on all LAN and WAN interfaces. They serve as an Internet front end for a Web server farm or a network cache server cluster, enabling the deployment of virtual Web sites. Net One has priced the CS-100 at $25,600 and the CS-800 at $50,700. It expects to sell a combined total of 200 switches in the first year of marketing.

Hoping to capitalize on the growth of Japan's still limited extranet market, BAY NETWORKS, INC. gave NET ONE SYSTEMS CO., LTD. exclusive rights to sell its Contivity Extranet Switch 1000 and to provide support services to customers. The $15,000 product allows businesses to set up virtual private networks using the Internet, thereby cutting the costs of private communications networks by as much as 40 percent compared with conventional methods. Bay Networks expected to report a 30 percent jump in Japan revenues in the year through June, although sales there represent only about 5 percent of the company's worldwide business.

Gigabit Ethernet pioneer PACKET ENGINES INC. has given HITACHI INFORMATION TECHNOLOGY CO., LTD. the right to market, sell and support its entire product line. That includes the Spokane, Washington company's G-NIC Gigabit Ethernet network interface cards, the FDR Gigabit Ethernet hub and the PowerRail family of enterprise routing switches. The hub, which supports up to 13 Gigabit Ethernet ports and one 10/100 megabit-per-second port, blends switched and shared design concepts to achieve switch-like performance while maintaining the cost and the ease-of-use advantages of a hub. The PowerRail routing switch is designed to meet the current and future requirements of large enterprise backbones, data centers and other high- performance network environments.

For its part, EXTREME NETWORKS, INC. named SUMISHO ELECTRONICS CO., LTD. to distribute the Summit48 switch, which provides 48 10/100-Mbps ports for desktop connections and two Gigabit Ethernet uplinks for high-bandwidth backbone connections. The Cupertino, California manufacturer claims that the Summit48 is the first product to deliver high density at a low cost. With Layer 2 functionality, it is priced at $12,500, while a switch with Layer 3 capability goes for $18,600 or so. TOKYO ELECTRON LTD. sells other members of the Summit family, while Extreme Networks supplies six Summit models to NEC CORP. on an OEM basis (see Japan-U.S. Business Report No. 340, January 1998, p. 25).

The Nways Ethernet networking family from IBM JAPAN LTD. has two new members. The 8275 Nways 10Base-T switch, designed for small businesses and workgroups, supports Web management as well as remote network management. It costs $1,500. The 8277 Nways Ethernet RouteSwitch, priced around $9,600, can be deployed as either a workgroup switch or an edge device. The 10/100Base-T switch provides 24 ports with an additional slot to support copper or fiber Fast Ethernet and/or 155-Mbps ATM.

New on the market from 3COM CORP.'s local organization are seven SuperStack II products targeted at a wide range of networking technologies. The key components of the SuperStack II Baseline family are 10-Mbps Ethernet workgroup hubs, an Ethernet workgroup switch with Fast Ethernet uplinks, autosensing dual-speed (10/100-Mbps) Fast Ethernet hubs, and 10/100-Mbps autosensing switches for high-speed connectivity. 3Com is touting the affordability of the Baseline series, which runs from under $400 to $3,400.

The Intel Express220T Series of stackable, dual-speed hubs is aimed at midsized and large workgroups and campus environments. Twelve and 24-port products with 10/100 connectivity are available. Up to eight units can coexist in a single stack for support of up 192 ports. INTEL CORP.'s subsidiary priced the 12-port model at $1,500 and the 24-port version at $2,200.

Positioning the SOHO (small office/home office) market to migrate easily from 10-Mbps Ethernet to 100-Mbps Fast Ethernet one desktop at a time, BAY NETWORKS, INC.'s subsidiary added three products to its NETGEAR family. They are the eight-port 10/100-Mbps DS108 Dual Speed hub, which lists for under $600, and the eight-port DS508 and the 16-port DS516 Dual Speed stackable hubs. Up to eight of the latter two models can be stacked in any combination to accommodate as many as 128 users. The DS516 costs less than $1,300.


What is said to be the first V.90-compliant modem on the Japanese market has been released by 3COM CORP.'s subsidiary. The U.S. Robotics 56K Faxmodem - External allows Internet users to download information at 56 kilobits per second, although the uplink is limited to 31.2 Kbps. It costs around $175. The company also released the U.S. Robotics 56K Voice Faxmodem Pro - External, which adds a full-duplex speakerphone and other message center capabilities to fast Internet connections. Its pricing is open.

PRIMUS TELECOMMUNICATIONS GROUP, INC., a McLean, Virginia provider of voice, data, private network and value-added services, has applied to the Ministry of Posts and Telecommunications for a Type I common carrier license so that it can provide international and domestic services in Japan over its own network. The company, which launched operations there in October 1997 through an acquisition, now has a Special Type II carrier license as well as international simple resale approval. It is a facilities-based carrier serving both residential and corporate customers. To better serve its retail and wholesale businesses, Primus is installing a NORTHERN TELECOM LTD. switching platform in Tokyo that will connect with its Nortel switch in Los Angeles. The company also has acquired capacity on the new Japan-U.S. Cable Network, which should go into service in the first quarter of 2000 (see Japan-U.S. Business Report No. 345, June 1998, p. 7).

Another Special Type II facilities-based carrier, TELEGROUP, INC. of Fairfield, Iowa, recently acquired its own transpacific capacity, thereby positioning it to offer better service at better prices to its retail customers. The company has had switching facilities in Tokyo since mid-1997. This summer, it extended service to Osaka. Direct domestic and international dialing is available in both metropolitan areas. Telegroup plans further services upgrades this year.

Through its subsidiary, LUCENT TECHNOLOGIES INC. released the DEFINITY ProLogix for small to midsize companies and branch offices of big organizations. Based on the DEFINITY Enterprise Communications Server hardware and software platform, the PBX (private branch exchange) combines such key system features as group page with DEFINITY ECS call handling and support for advanced applications like networking, wireless, messaging, automatic call distribution/help desk and data access. The open-priced ProLogix provides up to 600 ports and expandability to 25,000 ports.

Data transmission speeds beyond the gigabit-per-second range for local area networks are possible with a new optical-fiber cabling product from LUCENT TECHNOLOGIES INC.'s subsidiary. The SYSTIMAX OptiSPEED cable builds on the capabilities of the SYSTIMAX GigaSPEED cable introduced locally in April 1997. At the same time, the company released the LC Connector optical-fiber connector.

HARMONIC LIGHTWAVES INC. predicts that cable television operators will buy $1.4 million worth of its 1550-nanometer laser transmitters and optical amplifiers in the first year of marketing through SUMITOMO ELECTRIC INDUSTRIES, LTD. The MAXLink family is said to deliver the highest launch power and performance available for long-distance transmission in the CATV and communications industries. Another key selling point is the flexibility and the modularity that the laser transmitters and optical amplifiers provide for fiber-dense applications. As warranted, Sunnyvale, California Harmonic and SEI will work together to develop customized products for the Japanese market.

Advanced Meeting Solutions. That is how MINNESOTA MINING & MANUFACTURING CO. bills four products for remote personnel introduced by its SUMITOMO 3M LTD. affiliate. The $19,200 Dataconferencing System DCS3000 projection system allows participants in different locations to share documents during meetings, whether the information is in the form of paper, transparencies, electronic documents or 3D objects. The Videoconferencing System VCS3000, which costs $8,000, attaches to a monitor to allow face-to-face meetings among distant team members via a simple, intuitive interface and a handheld remote controller. The Audioconferencing Systems ACS2000 Series and ACS3000m, which can accommodate up to 40 participants in a large conference room, are said to provide much clearer, more natural conversations than with speakerphones. It is priced at $1,400. Rounding out the new products is the Ideaboard Conferencing System, which goes for $6,400 to $7,500, depending on configuration.

8X8, INC. tapped MITSUI & CO., LTD. to distribute its ViaTV Videophones. They include an easy-to-use set-top videophone, an inexpensive and flexible modular videophone and a desktop videophone with a built-in display. Regardless of the model, the ViaTV Videophone allows users to make full-color motion video calls over standard telephone lines without a computer. Saying that the Santa Clara, California company's products represent the first practical video communication devices, the trader expects to market 80,000 ViaTV Videophones in the next year through its network of small business and consumer sales organizations.

Like WEBTV NETWORKS INC. (see Japan-U.S. Business Report No. 345, June 1998, p. 23), ORACLE CORP. and its NETWORK COMPUTER, INC. affiliate are finding Internet access via set-top boxes attached to TV sets a tough sell. To give a boost to NCTV, which arrived in Japan in March (see Japan-U.S. Business Report No. 343, April 1998, p. 25), Oracle's subsidiary is providing NCTV server and SmartCard technologies to ISPs, including DREAM TRAIN INTERNET INC., as well as to companies like long-distance carrier DDI CORP. so that they can develop services for content providers, which encompass almost any company that wants to promote its products or services on-line.

With a Type I common carrier license in hand from MPT, the local affiliate of ORBCOMM GLOBAL, L.P., a provider of low-earth-orbit satellite data and messaging communications services, will begin operations September 1 (see Japan-U.S. Business Report No. 341, February 1998, pp. 24-25). The company will provide a wide range of services, but it expects much of its business to come initially from tracking and two-way communications for trucks and other transportation equipment and monitoring of remote environmental sites and industrial equipment.

An exchange rate of ¥140=$1.00 was used in this report.

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Designer Vivienne Tam's fall/winter collection for young women will be available in 12 stores this year through SANEI INTERNATIONAL CO., LTD., a sublicensee of ITOCHU CORP. The trader acquired a master license to import, manufacture and distribute the line in November 1997 from EAST WIND CODE LTD. after the New York City company terminated its original December 1996 licensing agreement with ORIZZONTI CO., LTD. Sanei International is projecting retail sales of $9.3 million in the first year and $21.4 million over three years for the Chinese-inspired Vivienne Tam line.

People serious about playing basketball have two new shoe options from the subsidiary of CONVERSE INC. Both products, which cost either $120 or $105 a pair, contain a new cushioning material in the sole and a gel-type shock absorber in the heel. They are claimed to give an integrated feeling between the foot and the shoe. Converse expects to sell 60,000 pairs of the two National Basketball Association-type shoes.

An exchange rate of ¥140=$1.00 was used in this report.

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Sales of HONDA MOTOR CO., LTD.'s made-in-America natural gas-powered Civic sedans have started, two months after they were put on the U.S. market (see Japan- U.S. Business Report No. 344, May 1998, p. 9). However, the automotive manufacturer expects to sell in Japan just 100 of the 1,000 environmentally friendly vehicles it plans to produce annually at its East Liberty, Ohio plant, in part because it is difficult to find places that sell compressed natural gas. Honda has received orders for 120 of the $14,300-and-up Civic model, almost entirely from gas utilities.

The import arm of FORD MOTOR CO. has added a less powerful, less expensive model to its line of Galaxy minivans, which are built in Portugal by a firm that Ford owns with VOLKSWAGEN AG. The GLX comes standard with a four-cylinder, 2,300- cubic-centimeter engine that produces 145 horsepower. The initial GHIA model has a V6 engine (see Japan-U.S. Business Report No. 341, February 1998, p. 25). Ford has priced the seven-seat Galaxy GLX at $23,500. With the broader line, it expects to sell 1,000 Galaxy vans this year.

An exchange rate of ¥140=$1.00 was used in this report.

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An alternative to the standard ring-pull tab found on beverage cans could be available soon in Japan. BALL CORP. of Muncie, Indiana has licensed its Touch Top technology to CHUKYO IYAKUHIN CO., LTD. Known as a universal end, Touch Top has a distinctive center-push design and dome profile. Usable with both aluminum and steel cans, it creates a bottle-like opening with smooth edges. The Nagoya-headquartered manufacturer currently is trying to develop a market for the technology among can makers. Touch Top production eliminates the tab manufacturing process without requiring major changes in filling lines or vending machines.

VAPORTEK, INC.'s subsidiary has introduced a freestanding air purifier for the home that is made specifically for the Japanese market. CONSOL CORP. is distributing the Sussex, Wisconsin company's product, which costs under $50. It is projecting first-year sales of $3.6 million.

A Rooms To Go Kids section is open at a JUSCO CO., LTD. store in Sagamihara, Kanagawa prefecture. Last fall, Seffner, Florida-based furniture discounter ROOMS TO GO INC. agreed to provide management advice to the big supermarket operator and to allow it to use the Rooms To Go name on furniture showrooms (see Japan-U.S. Business Report No. 338, November 1997, p. 25). The first location sells about 800 products, including decorative items as well as furniture, for children ages 4 to 14. Ten different furniture groupings are on display, although pieces can be purchased individually.

Having switched distributors, TUMI, INC., a maker of high-end luggage, briefcases and similar products, hopes to boost its near-term annual Japan sales to $5 million from $3.6 million in FY 1997. The Middlesex, New Jersey company now is working with Osaka's ACE CO., LTD., which sells 70 of its products to department stores and specialty shops. The Tumi line, which is priced from $535 to $915, is made from lightweight, durable nylon. Within five years, Ace expects annual sales to reach $17.9 million. OKANO CORP. had represented the line since 1991.

The stila line of cosmetics, the creation of a top Los Angeles makeup artist, will be brought to the Japanese market by the local powerhouse in this business. STILA COSMETICS, INC. has tied up with SHISEIDO CO., LTD. Marketing of the 37 different stila products actually will be handled by INTERACT CO., LTD., a wholly owned subsidiary of Japan's top cosmetics company. It was formed a year ago to introduce foreign high-end brands. Distribution will start this fall, with plans to launch stila in five name department stores in the first year. During that time frame, the line is expected to produce sales of nearly $3.3 million. Within five years, InterAct hopes to be selling stila products at 40 locations.

The world's fourth-largest advertising network, New York City's BBDO WORLDWIDE, has formed a partnership with I&S CORP., Japan's eighth-biggest ad agency with 1997 billings of $912 million. The tie-up followed the April acquisition of a 20 percent stake in I&S by OMNICOM GROUP INC., BBDO's Manhattan-based parent. Through the combination of their expertise, the new partners expect to provide advertising and marketing communications services to Japanese companies operating locally or internationally as well as to foreign companies doing business in Japan. Before teaming up with I&S, BBDO, which had 1997 billings of $9.3 billion, dissolved a 1983 relationship with the Tokyo ad agency's rival, ASATSU INC.

Hollywood giant SONY PICTURES ENTERTAINMENT INC. has teamed with parent SONY CORP. to develop films, particularly animated ones, in Japan. The studio has opened a planning and production office in Tokyo and is negotiating with several local animation companies. It hopes to start work on the first film by the end of the year. Sony will cover part of the production costs in exchange for distribution rights.

An exchange rate of ¥140=$1.00 was used in this report.

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