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No. 365, February 2000

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Japanese Companies in the US


ELECTRIC MACHINERY

For the past two years or so, big industrial control systems player GE FANUC AUTOMATION NORTH AMERICA, INC. has supplemented internal growth with acquisitions (see Japan-U.S. Business Report No. 360, September 1999, p. 5). Its latest purchase adds GAGETALKER CORP. The Kirkland, Washington company provides flexible hardware, software and service products designed to help manufacturers monitor and control the performance of their production equipment and products during the manufacturing cycle. GE Fanuc officials see considerable complementaries between the CimWorks GageTalker hardware and software lines and their firm's OpenFactory CNCs (computer numerical controls), CIMPLICITY software and general automation products. Charlottesville, Virginia-headquar-tered GE Fanuc is a 14-year-old joint venture between FANUC LTD., the dominant world supplier of CNCs, and GENERAL ELECTRIC CO.

In 1998, HITACHI COMPUTER PRODUCTS (AMERICA), INC. moved into contract manufacturing, producing printed circuit boards and other electronic equipment for small but growing companies in a variety of fields. That business has expanded so much that the Norman, Oklahoma subsidiary of HITACHI, LTD. is investing $3 million to add a third assembly line and to upgrade another. The new capacity will become operational sometime in the first half of 2000. It will create 50 or so jobs. More than 260 people already work at the factory, which started off in 1987 making disk drives and related electronic products for other Hitachi companies.

KYOCERA CORP. netted $280 million from the sale of 5.25 million of the shares that it owns in AVX CORP., a major manufacturer of multilayer ceramic capacitors and related passive electronic components. The divestiture trimmed Kyocera's ownership of the Myrtle Beach, South Carolina-based company to approximately 70 percent from 75 percent. It will use the proceeds to cover losses caused by the write-off of bad loans by a leasing company subsidiary in Japan and by the collapse of the IRIDIUM LLC global satellite telephone and paging venture (see Japan-U.S. Business Report No. 360, September 1999, p. 9). AVX, which has plants in Colorado Springs, Colorado, Bideford, Maine, Olean, New York, Conway, South Carolina and at headquarters as well as overseas, has been a Kyocera company since 1990.

The Temecula, California subsidiary of TAMURA CORP., which supplies such magnetic components as audio, power and telecommunications transformers, coils and inductors, opened a telecommunications and data communications magnetic design center at headquarters. The engineers and technicians on staff will focus on magnetics for xDSL (digital subscriber line), ISDN (integrated services digital network), LAN (local area network) and other existing and emerging communications technologies. TAMURA CORP. OF AMERICA has a factory in Valley Stream, New York, the result of a fall 1994 acquisition.

The details still are sketchy, but PIONEER CORP. plans to open a R&D facility in the United States this spring to ensure that it remains on top of technical developments in the emerging field of networked digital audio-visual home entertainment products. Initially, the primary mission of the center, which will be staffed by approximately 10 researchers dispatched from Japan, will be to collect information. In time, though, its mandate could be expanded to include forging ties with promising U.S. start-ups in the networking and software fields. Long Beach, California, the home of PIONEER NORTH AMERICA, INC., reportedly is the leading contender for the new R&D unit. .....The disclosure of this pending move followed the announcement that PIONEER CORP. and 14 other companies had joined the HAVi (home audio-video interoperability) Organization. Eight consumer electronics multinationals — including HITACHI, LTD., MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., SHARP CORP., SONY CORP. and TOSHIBA CORP. — formed this group last November after working together for more than two years to develop specifications for a digital home entertainment networking architecture. The other Japanese companies joining the HAVi Organization were: KENWOOD CORP., MITSUBISHI ELECTRIC CORP., SANYO ELECTRIC CO., LTD., SEIKO EPSON CORP. and a YASKAWA ELECTRIC CORP. affiliate. SUN MICROSYSTEMS, INC., the promoter of the Jini home-networking standard, also is a new member.

SONY CORP. has won the backing of two leaders in the delivery of music over the Internet for its electronic music distribution technologies — the ATRAC3 sound- compression format and the OpenMG copyright-protection technology. For its part, REALNETWORKS, INC. will integrate support for Sony's music technologies into its RealJukebox software, which allows consumers to play, record, organize and search for music on the Internet from a single PC interface. By this summer, it is expected, users of the Seattle company's free service will be able to easily download and securely transfer music to Sony's portable audio players, such as the Memory Stick Walkman and the VAIO Music Clip, through ATRAC3 and OpenMG. .....Likewise, LIQUID AUDIO, INC., the other big provider of software and services for the digital delivery of music over the Internet, agreed to integrate SONY CORP.'s OpenMG copyright-protection technology so that music downloaded via the Redwood City, California firm's Liquid System can be securely played back on Sony's portable audio players. The Liquid System also will support ATRAC3 as a primary sound-compression format, making it possible for users of the Liquid Player to quickly download ATRAC3 music content directly to their PCs.

Meanwhile, both SANYO ELECTRIC CO., LTD. and TOSHIBA CORP. are working with LIQUID AUDIO, INC. to ensure that their forthcoming portable digital audio products are compatible with Liquid Music. The collaboration gives the two consumer electronics companies access to a large selection of digital music — more than 50,000 tracks from 1,000 different labels. It also guarantees copyright protection of downloads and playbacks by technology that meets Secure Digital Music Initiative standards.

The first of what SONY CORP. is calling personal video recorders should be in stores in the first quarter of this year. These hard-drive-equipped devices, which are based on technology licensed from TIVO INC. (see Japan-U.S. Business Report No. 361, October 1999, p. 5), will allow consumers to personalize the television viewing experience. They will be able to store about 30 hours of programming. The Sony product will cost roughly 20 percent less than initially expected, or approximately $400. The consumer electronics giant has a 7.5 percent stake in Sunnyvale, California-based TiVo.

The Sony-TiVo personal video recorders will be going up against similar devices from MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. dubbed hard disk recorders that incorporate REPLAY NETWORKS, INC.'s technology (see Japan-U.S. Business Report No. 358, July 1999, p. 6). Now, the Mountain View, California-based company has the backing of a second major Japanese consumer electronics manufacturer. SHARP CORP. licensed the ReplayTV platform for a line of branded digital video recorder products. Beyond saying that buyers would receive a free lifetime subscription to the basic ReplayTV service, however, Sharp released no details about its device or when it might be available.

SONY CORP. has previewed its third portable audio player capable of playing back music downloaded from the Internet via a PC. However, unlike the Memory Stick Walkman and the VAIO Music Clip, which use the company's so-called memory stick technology, the cigarette lighter-size Network Walkman employs conventional flash memory. Its 64 MB of capacity can store about an hour's worth of CD-quality music. The Network Walkman should arrive in the United States in April.

Whether because of the price of the equipment or the shortage of programming, digital television sets still are a product waiting to take off in the United States. Japan's consumer electronics giants, though, keep trying to entice buyers. For instance, HITACHI, LTD. previewed for the first time in the United States an all-digital, large-screen, high-definition, rear-projection set. One of the innovations of the UltraVision Digital/DLP, which will be in stores in the fall of 2000, is the use of TEXAS INSTRUMENTS INC.'s digital light technology (see Japan-U.S. Business Report No. 356, May 1999, pp. 18-19). The combination of the two companies' expertise, Hitachi says, will deliver maximum picture performance — including a resolution of 1280 x 720 pixels, a screen brightness five times greater than that of a large-tube set and a contrast ratio of 500:1 — plus excellent motion video.

Coming in the fourth quarter of 2000 from SHARP CORP.'s Mahwah, New Jersey marketing unit will be what it bills as the industry's first 28-inch LCD high-definition display. This ultrathin product, the LC-28HD1, is the first from the company to provide full 720P high-definition native display resolution — the same capability that will be available with the Hitachi-branded TV set. Among the display's attributes, according to Sharp, is extremely clear viewing of a wide range of digital video sources, including DVDs and PCs as well as high-definition TV signals.

In the meantime, SHARP CORP. is shipping to the United States 50-inch plasma display panels, primarily for use as advanced wall-mounted TVs. The skinny screens, which are priced around $21,000, are produced for Sharp on an original equipment manufacturer basis by PIONEER CORP.

An exchange rate of ¥105=$1.00 was used in this report.aaaaaa

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