Week ended November 4, 2007

Vol.254
◆High-tech Sector
◆Earnings Roundup
◆Initial Public Offerings
◆Basic Electronics Industry Statistics

DoCoMo(9437 TSE1) Launches 23 New Models of Cell Phones in a Bid to Recapture Market Share
NTT DoCoMo (Stock code: 9437) announced 23new models of mobile phones, adding more new models than its two rivals. The company’s new models focus on high-speed, one seg and global roaming phones. NTT DoCoMo was the only one among the three top carriers to suffer a net loss of subscribers after the number portability system was introduced last year. The new models were also launched with an eye on getting competitive advantages as new rate plans are being introduced. NTT DoCoMo plans to raise the prices of handsets while slashing the basic monthly charge.

Electronic Devices Production Picks Up in Japan
Production of electronic devices, that includes integrated circuits and LCD devices, seems to be picking up from the second half of the current fiscal year, according to JEITA, the sector’s trade association. Production was up about 3% year-on-year in July and again in August. Production in the first eight months was up 0.3%. Global semiconductor sales rose 5.9% year-on-year, according to Semiconductor Industry Association. Cumulative sales of semiconductors to September increased 3.5%.
DSC Sales on the Upswing
DSC sales continue to increase and there are no signs of any slowdown in the near future. CIPA, the sector’s trade body raised its shipments forecast for 2007 to 9,361 units. This was the second year in a row that the beginning-of-year forecast has been revised upward. Canon (Stock code: 7751) plans to ship 2,400 units in 2007, up from 2,110 shipped in 2006. Sony (Stock code: 6758) will ship an estimated 2,000 units, an increase of 260 units from the previous fiscal year.
Printed Circuit Board Demand at High Levels
The printed circuit board market is expected to hover at a high level in 2007, underpinned by a growing demand for use of PCBs in mobile devices such as cell phones, digital cameras and portable audio players. Rising production of digital home electronics, including FPD TVs, is also lifting demand. Expanding demand for car electronics is also a factor behind the higher demand for PCBs. Reflecting the above demand trends, production of high-density PCBs, built-up PCBs and PCBs for high-performance modules is rising rapidly. Production of PCBs in 2007 is expected to increase 1.9% to 1.33 trillion yen. This comes following a production gain of 16.6% YoY in 2006. The highest growth is expected to be in multi-layer PCBs, particularly those with more than 10 layers, production of which is likely to be up 16.3.
Semiconductor Demand to Stay Strong in Second 2008
Demand for semiconductors is likely to stay robust in the second half of 2007 and the strength should extend through 2008, according to industry sources. In a recent survey of 12 major semiconductor manufacturers, five said that they expect sales to increase more than 10% and six expect sales to increase by a single digit figure. Only one respondent expects sales to stay flat in 2008. Questioned about growth drivers, respondents selected digital home electronics and mobile phones as the principal sources of demand.

Electrical Equipment Manufacturers Post Strong Interim Profit
Japan’s eight major electrical equipment manufacturers have now released their interim results. Five of the eight manufacturers posted higher operating income. Prices remained under strong pressure and competition heated up in the North American market. On the other hand, their conventional businesses that is, white goods did well in Europe and in emerging markets.

 

Sales

Operating income/loss

TV business Operating income/loss

Hitachi

52,804 (11)

1,216 (513)

-500

Matsushita

45,253 (3)

2,199 (6)

Moved into black

Sony

40,595 (13)

1,897 (2,953)

-500

Toshiba

36,899 (17)

825 (27)

-100

Mitsubishi Electric

18,897 (6)

1,291 (38)

Into the red

Sharp

16,408 (129

790 (-12)

Into the black

Pioneer

3,831 (1)

22 (-81)

Into the red

Victor

3,301 (-11)

-53 (-)

Into the red


Ibiden(4062 TSE1) Headed for Record Profit
Ibiden (Stock code: 4062) is likely to report record consolidated operating income of 75 billion yen up 9% year-on-year on a sales gain of 9% to 435 billion yen in the current fiscal year to March 2008. The company had projected a profit decline of 4% to 66 billion yen. Strong sales of diesel particulate filters in the U. S. and Europe and cost cutting are expected to lift profit. Interim operating income was up 29% to 40.5 billion yen.

Synergy Marketing (3859 HRLS)
Synergy Marketing Co., Ltd., a firm specializing in the planning and development of CRM products and services and offering other CRM-related services such as CRM strategy development, will list on the Hercules market of the Tokyo Stock Exchange on November 20. The company will offer 2,000 shares to the public in its initial public offering. Of those, 1,000 are shares currently held in private. The tentative price range was announced on October 31. The fixed offering price will be announced on November 9. Daiwa Securities SMBC is the lead underwriter of the offer.
MIC Medical(2166 JAQ)
MIC Medical Corp., a maker of medical equipment, will list on the JASDAQ Securities Exchange on November 30. The company will offer 3,940 shares to the public in its initial public offering. Of those, 2,540 are shares currently held in private. The tentative price range was announced on November 13. The fixed offering price will be announced on November 20. Nomura Securities is the lead underwriter of the offer.

WebMoney(2167 NEO)
WebMoney Co., Ltd., a company marketing servers supporting settlement of e-commerce transactions, will list on the JASDAQ Securities Exchange’s NEO market on December 6. The company will offer 8,000 shares to the public in its initial public offering. Of those, 4,000 are shares currently held in private. Daiwa Securities SMBC, the lead underwriter of the offer, has a green shoe option to offer an additional 1,200 shares in case of exceptional demand. The tentative price range will be announced on November 15. The fixed offering price will be announced on November 27.


Prod.
Ship.
Inv.
Capacity
utilization
H. Elec.
machinery
Cons.
appliances
Electronics
Sector
Cons.
electronics
Industrial
electronics
Elec.
devices
Semicon
(Production)
Consumer
electronic
(sales)
Oct
113.2
118.7
83.4
80.5
2,474
1,500
17,032
2,897
5,311
8,823
3,904
218
Nov
112.9
118.2
85.0
82.9
2,507
1,545
17,643
2,939
5,972
8,731
3,823
238
Dec
111.6
116.0
83.6
85.4
2,568
1,771
16,809
2,468
6,005
8,337
3,544
306
Jan
110.8
116.8
82.9
76.3
2,327
1,342
15,193
1,657
5,335
8,201
3,626
257
Feb
110.4
117.4
84.0
84.1
2,507
1,463
16,648
2,070
6,535
8,043
3,539
177
Mar
102.6
112.3
78.9
94.7
3,487
1,550
19,984
2,448
8,513
9,023
4,053
214
Apr
108.9
114.8
78.3
96.5
2,410
1,739
15,644
2,552
5,024
8,068
3,592
205
May
110.3
117.3
77.2
101.5
2,359
1,624
15,402
2,427
4,781
8,195
3,722
198
June
108.6
118.2
72.4
116.2
2,615
1,828
16,731
2,357
5,956
8,419
3,835
209
July
112.0
114.8
79.8
105.5
2,569
1,645
18,515
2,251
5,934
10,330
3,991
280
Aug
114.5
123.6
75.1
72.9
2,474
1,198
16,581
2,268
5,532
8,781
3,995
255
Sept
111.5#
117.3#
72.9
YoY
1.5
2.0
-10.6
1.3
7.1
-5.2
4.6
14.3
4.4
2.4
2.0
22.4
Base year 2000 = 100 (seasonally adjusted); 100 million yen, Y-o-Y: year-on-year percentage change, * preliminary
Source: Ministry of Economy, Trade and Industry; Japan Electronics Industry Association and other trade associations
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