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No. 364, January 2000

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Japanese Companies in the US


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

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

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

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

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

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

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

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