December 1999
CONTENTS:

FEATURE
Low-Cost Internet Access Coming Closer

MARKET NEWS
CAD Developer Answers Call Of Mobile Telecom
Japanese Hinge Supplier Aggressively Targets U.S. Computer Market
Toshiba To Market 6.3-in. 1,024 x 768 LCD Panel

NEW TECHNOLOGY
Electrons Tunnel Into Memory
X.Ethic, IBM to Jointly Research Wearable Machines
Teleconferencing ëFace To Faceí

MULTIMEDIA ALERT
Sharp to Market 50mm-Thick, 15-in. TFT-LCD Display
Jupiter Telecom To Take Cable-TV Stations Digital
Cyber SIGN Signature Verification Technology Used in Sharp Personal Digital Assistant

BIO-SCIENCE DEVELOPMENT
Fat-Soluble Compound Touted As Cancer Fighter
Micromachines Can Handle Turbine Repairs, Blood Clots
New Pressure Sensor Boasts Enhanced Sensitivity

ENVIRONMENT
New Paper, Pulp System Cheap, Green
JR Eastís Green Record Catches Investorís Eye
Ishikawajima-Harima Recycles Plastics

SEMICONDUCTORS
Casio, Oki to Set Up Fabless Firm to Develop Microchip Packaging Technologies
NEC, Hitachi Chip Alliance Set to Expand
NEC Developing 1GIPS Microprocessor with Low Power Consumption

SPECIAL SECTION
Fusion Research Spin-Off Makes Solar Cells Less Costly

STRATEGIC ALLIANCES
JAPAN IN THE UNITED STATES
THE UNITED STATES IN JAPAN

FEATURE

Low-Cost Internet Access Coming Closer

Mitsui, others promote technology that enables high-speed data service via ordinary phone lines.

Critics regularly cite high local telephone charges as a major obstacle in the way of promoting the spread of the Internet in Japan. With local phone circuits under the virtual monopoly of the regional carriers in the Nippon Telegraph and Telephone corp. (NTT) group, efforts to offer low-price Internet access have largely been concentrated on networks based on cable television and wireless communications.

But some companies have started taking up the third option of providing inexpensive, unlimited Internet access via NTT lines, thanks to a technology called asymmetric digital subscriber line (ADSL). Mitsui & Co. has set up a group that is working toward a low-cost, fixed-fee Internet connection service via phone lines. The group brings together 17 Internet service providers (ISPs), including Fujitsu Ltd., DDI Corp., Tokyo Telecommunication Network Co., Japan Telecom Co. and AOL Japan Inc.

The key to the groupís plan is ADSL technology, which make sit possible to use the existing phone circuits for high-speed data transmission. Since ADSL uses a different frequency range than voice communications, it is possible to use one line for both data and voice communications simultaneously. Regional phone companies and others have offered services based on the technology in the U.S. since 1996.

In Europe, France Telecom and British Telecommunications Plc have been working toward the introduction of ADSL-based Internet connection services. ADSL-based services have become viable in Japan following a decision by the Ministry of Posts and Telecommunications in July to scrap the regulation prohibiting third-party to access subscriber phone lines without going through NTTís switchers.

Although the door was opened with that bit of deregulation, a high initial investment required remains a major hurdle for introducing ADSL services, with one estimate putting 50 billion yen ($476 million) as the total cost of building ADSL infrastructure capable of serving 1 million subscribers.

The group led by Mitsui aims to keep the costs as low as possible by jointly purchasing equipment and building infrastructure. With scale merit, the group hopes to offer an unlimited high-speed Internet connection for no more than 5,000 yen per month. The Mitsui-led group is not the only one eyeing an ADSL-based Internet connection service, however. Tokyo Metallic Communications Inc., a telecommunication joint venture, is set to start a trial ADSL service in six districts inside Tokyo jointly with KDD Corp.

While KDD, the one-time international telephone monopoly, will cooperate in the trial by allowing use of its relays, it plans to start offering ADSL service on its own next year. While these developments are good news for Internet users, there are still a number of uncertainties, including the service fees. Pricing of the services is still very much a wild card because it largely depends on NTT.

ADSL service providers will use the phone lines of the NTT groupís eastern and western regional telecommunications companies and pay connection fees to the two carriers. In public, the newcomers take the aggressive stance that the connection should be free because NTT is already collecting the monthly circuit-usage fee from phone subscribers. In private, however, many are said to be praying NTT wonít charge more than 1,000 yen per customer per month.

Some companies are also stressing the need for better information disclosure on NTTís part. The ADSL-based access service groups are not the only forces working toward offering affordable unlimited Internet access. Although its service will be based on wireless technology and thus not dependent on NTTís phone lines, SpeedNet Inc., a joint venture among Softbank Corp., Microsoft Corp. and Tokyo Electric Power Co., shares the same vision of realizing unlimited Internet access for around 5,000 yen or less per month.

The pressure from these companiesí efforts has been credited as the major reason NTTís regional carriers lowered the planned monthly fee for unlimited Internet connection to 8,000 yen from the initial target of around 10,000 yen. But it remains to be seen if the newcomers will be able to clear the various hurdles, technical and otherwise, and become serious players in Japanís Internet access market.

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MARKET NEWS

CAD Developer Answers Call Of Mobile Telecom

Zuken Inc. is accelerating tie-up strategies. The Yokohama-based developer of computer-aided design (CAD) systems for printed circuit boards has joined hands with Toshiba corp. in the field of next-generation cellular phones, following an alliance with a U.S. venture business in commissioned-chip design.

The company is clearly shifting from the design of printed circuit boards to the development and design of core parts of the mobile-telecommunications and networking businesses. Under the accord, Zuken will introduce compression technology conforming to the MPEG-4 international data-compression protocol from Toshiba.

It will start marketing next spring a package of development methods for cell phones based on the technology. Toshiba will not only provide intellectual property to Zuken but also directly market integrated circuits to mobile phone makers. High-speed data communications will be possible with the next-generation cellular phones, for which service will start in 2001.

Since demand for the next-generation cell phones is expected to grow rapidly for use as video-phones and image-data terminals, major manufacturers, including NEC Corp. and Matsushita Electric Industrial Co., are speeding up development. Zuken has changed the target of its core business in the past two years or so. Previously it just received maintenance-contract fees for its design software, but there are limits to the business.

The company now aims to construct a comprehensive design environment by providing design solutions that meet the needs of its customers. For instance, the company plans to sell chips off the shelf, custom-design microchips, and build and manage information networks. Printed circuit boards will be just one of the elements. Zuken bought a stake in LightSpeed Semiconductor Corp., a U.S. venture company, in fall 1998 and has started ìfablessî production, farming out manufacture to a Taiwan chip maker.

Japanese Hinge Supplier Aggressively Targets U.S. Computer Market

Strawberry Corporation, a Japanese company and global segment leader in the supply of high-performance micro-hinges and precision engineering services, announced its entry into the multi-billion dollar U.S. computer market. As a kick-off to their US market entry, Strawberry will debut its precision hinges and design/production services during COMDEX/Fall '99 in Las Vegas November 15 - 19.

The emergence of Strawberry Corporation as a major global player has been rapid. A subsidiary of the Kato Corporation, Strawberry was created just three years ago as a customer-focused firm utilizing leading edge design and production. Today, Strawberry is the leading worldwide supplier of micro-hinges for cell phones, and boasts the largest number of CAD/CAM systems and operators in the industry at their design facility in Nagaoka, Japan.

Strawberry will introduce its patented SURETORQUE free-stop hinge, which has the smallest radius of any flat, spring-type hinge. Also debuting is the company's patented plastic/metal HEXATORQUE hinge, the world's first greaseless component of its kind. Strawberry will also present details on its programs for custom-modifying components and designing innovative hinges based on the concept drawings of electronics industry design engineers.

Following the COMDEX launch and demonstrations, Strawberry Corporation plans to initiate an aggressive marketing and public relations campaign targeted towards the American market. The campaign will be designed to communicate the global success of the company and instill a sense of confidence in US companies who might not have heard of Strawberry previously. Initially, Strawberry intends to target the hinge market for computers, PCs and cell phones.

Toshiba To Market 6.3-in. 1,024 x 768 LCD Panel

Toshiba Corp. plans to start sample shipments of the LTM06C 310, a 6.3-in. XGA color thin-film transistor liquid-crystal display panel with 1,024 x 768 pixels in January 2000. Its sample price is 100,000 yen. (105.25 yen = US$1) Toshiba is scheduled to start mass production in April 2000. It will be used for mobile information devices, electronic books, photo viewers and other products.

According to Toshiba, its screen size of 6.3-in. is currently the smallest XGA. The company uses low-temperature polycrystalline silicon technology. The dot pitch is 0.126mm, which is equivalent to 202 pixels per inch. Its screen luminance is 70 candela, the contrast ratio is 250:1 and the response time is 40ms for rise and fall. It can display 260,000 colors. Its power consumption is 2.2 watts and it weighs 130g

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NEW TECHNOLOGY

Electrons Tunnel Into Memory

In the not-so-distant future, portable computers may not have hard drives at all. Instead, they may store data using a magnetic-memory medium based on a new type of element known as a ìtunnel magnetoresistanceî element. This magnetic memory will retain the data even when the power is cut and will be able to store data at high densities and operate at fast speeds.

Several leading computer makers, including NEC Corp. and International Business Machines Corp., are working on the development of tunnel-magnetoresistance elements. However, it is a pair of research institutes affiliated with Japanís Agency of Industrial Science and Technology that seem the closest to bringing the technology to practical implementation.

In a tunnel-magnetoresistance element, a layer of insulating aluminum oxide is sandwiched between a layer of iron and one of an iron-cobalt alloy. When the insulating layer is thin enough, electrons can tunnel across the insulator. The resistance value of the current that flows during such tunneling events can be used to read and write data bits.

The new tunnel-magnetoresistance element, developed by a group from the Electrotechnical Laboratory and the national Institute for Advanced Interdisciplinary Research comes very close to the level of difference in resistance between layers deemed necessary for reliable reading of data. The greater the relative resistance between the two metal layers, the easier it is to read data bits. The target is a ratio of 30%, and the research group has managed to near the practical level with a 26% ratio.

The group achieved this success by developing a way to fabricate layers of high-quality aluminum oxide with higher precision. Their technique allows the creation of elements with a resistance value of just 300 ohms per square micrometer.

X.Ethic, IBM to Jointly Research Wearable Machines

X.Ethic Inc., a control software development firm, said on Nov. 1 it will start joint research on wearable computers with IBM Corp. of the United States. The research is aimed at finding a way to fully use wearable machines in corporate information systems while keeping users unaware of them. The companies will pick out various situations in which wearable machines could be used, e.g. for inspections and inventory management on construction sites, in factories or in warehouses.

They are looking at ways to promote ideas to potential user companies about how to optimize use of wearable computers in their systems used in those situations.

The companies are focusing mainly on applications to centrally manage on-site workers regardless of distance and location. On-site staff members will be able to send real-time, on-site data with video and sound through wireless equipment, cellular phones or PHS phones. IBM will develop hardware, while X.Ethic is to develop software. X.Ethic aims to accumulate know-how through this joint research, and eventually to build a central operation management system with a building or plant facilities using wearable machines. On the same day, the company also launched a cooperative body called Wearable Catalyst Consortium to accelerate research of software related to wearable computers. U.S. companies including Sentel Corp., WearableTech Corp. and ZOCOM INC will join the consortium. The consortium is open to new members to collectively reinforce planning and development of corporate mobile systems using wearable equipment.

Teleconferencing ëFace To Faceí

Researchers develop large-screen system using Windows

A research group that includes the University of Tokyo and DDS Inc., a Nagoya developer of control software, has developed a large teleconferencing system that can show life-size images of the participants. Unlike conventional teleconferencing setups, the new system allows users to look each other in the eyes and feel as if they were carrying on the discussion in the same room.

The system can be used for purposes other than business conferences, such as remote golf lessons. NTT Fanet Systems Corp. of Tokyo, which is also a member of the research group, plans to market a version next year. The system - developed by Hiroshi Yasuda, a professor at the University of Tokyo, and others - is composed of a camera, a projector and a special transparent screen that passes light only at certain angles.

A camera behind the screen photographs a user facing the screen; at the same time, the image of the upper part of another user is projected on the screen by a projector placed under the camera. The user cannot see the camera and sees only the image of the other user on the screen. The screen can be as large as 40 inches. When the user shows a document to the screen, the person on the other side can read it.

Since the camera is placed at the height of the usersí eyes, not on the screen as in conventional systems, if one user talks while looking the other in the eye on the screen, the two can have a ìface-to-faceî discussion. Conventional teleconferencing systems use small screens and do not allow people to look each other in the eye while talking. The newly developed system also enables users to share Windows application software on the screen, mutually operating the software at the same time. The researchers have also developed a system that uses two screens connected vertically.

The system can project a userís whole body so as to create the illusion that the person is really right there in the room. The system has potential applications for remote lessons in golf, tennis or dance. The prototype was designed for discussion between two people only, but the research group is continuing development so the system will be capable of handling conferences of three or more. The group aims to offer the system for sale as early as possible.

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MULTIMEDIA ALERT

Sharp to Market 50mm-Thick, 15-in. TFT-LCD Display

Sharp Corp. said it will start selling a 15-inch TFT-LCD display, the "LL-T1510A," on Nov. 10. It features a monitor with a thickness of 50mm, which is about a 40 percent less than its previous model. It has a resolution of 1,024 x 768 dots. The company used its own technologies of wide viewing angles and low reflection to develop the display. Sharp will release it at an open price. The company plans to ship 5,000 units a month. Both horizontal and vertical pixel pitches are 0.297mm. It displays a maximum of 16.19 million colors. It has a maximum luminance of 200 cm per square meter and a contrast ratio of 300:1. The viewing angles are 140 degrees for up and down, and 120 degrees for left and right.

It handles analog RGB, H/V separate and composite video data as input signals. The horizontal and vertical scanning frequencies are 24.8KHz-60.2KHz and 56Hz-75Hz, respectively. As interfaces with personal computers, the display has a mini D-Sub connector (15 pins) and Universal Serial Bus ports. It has an upstream USB port and two downstream USB ports. The display can be connected to Windows 98, 95, NT or Macintosh machines.

Jupiter Telecom To Take Cable-TV Stations Digital

Jupiter Telecommunications co. has decided to enable its 22 stations to broadcast digital programming by next autumn. Japanís largest cable-television operator aims to expand viewership prior to the introduction of digital-satellite broadcasting, which will start next September on a trial basis.

The decision comes as good news for semi-public Japan Broadcasting Corp. (NHK) and supporting the introduction of digital TV, as it will help them achieve their goal of popularizing the service as early as possible. The broadcasters target reaching 10 million subscribers within 1,000 days of introduction of the service, with half the number drawn, it is hoped, from the ranks of current cable-TV subscribers.

Digital-broadcast viewers will either purchase parabola antennas and receivers, or subscribe to a cable-TV service. Of the 9.46 million subscribers to NHKís analog-satellite broadcasting service, some 30% are cable-TV viewers. Distribution of digital programming, with its high picture quality, is premised on the digitization of cable-TV stations. However, many of the 738 cable-TV operators in Japanís highly fragmented cable-TV market cannot afford the estimated 1 billion per-station cost of digitalization investment.

Many of the cable-TV stations which cannot go digital before next September will likely convert digital programming into analog. However, consumers will not opt for cable-TV stations, if picture quality and services are inferior to what will be available through nonconverted programming.

Although the Ministry of Posts and Telecommunications has set a 2010 deadline for digitization of cable TV, analysts point out that the real deadline is the end of next year, when such broadcasting begins. The future of cable-TV operators will likely depend, to a large extent, on whether they can offer digital-broadcast programs to their customers at an early date.

Cyber SIGN Signature Verification Technology Used in Sharp Personal Digital Assistant

Signature verification technology has come one step closer to commonplace use by millions of mobile computer users, thanks to its inclusion in a Personal Digital Assistant, or PDA, offered by Sharp Electronics. The groundbreaking technology, a product of Cyber SIGN, Inc., holds great promise as a simple, natural, and economical way for companies to ensure network security via remote PCs, especially PDAs.

Cyber SIGN's Biometric Dynamic Signature Verification was first included in April 1999 in the Sharp Power Zaurus Series PDAs. Integrated with the system BIOS, it provides pre-OS power-on security for the handheld devices. This use of a Biometric Authentication method in the BIOS of a computer device is an industry milestone -- and industry first. Though Power Zaurus PDAs are currently only available in Japan, initial customer interest in the product's signature biometric has been sufficient to prompt widespread attention by manufacturers in the U.S.

Cyber SIGN's Enterprise system of dynamic signature verification goes far beyond the look or shape of a person's signature. In fact, it tracks four dimensions -- speed, style, pressure, and timing -- which are absolutely unique to the individual. Fraudulent duplication of all four dimensions is virtually impossible; a written copy of an authorized signature is useless as well. Even more, Cyber-SIGN's technology is affordable and requires no special hardware, other than an inexpensive digitizing tablet or PDA to capture the user's signature.

In 1996, engineers at CADIX, the Japanese parent company of Cyber SIGN, established an Internet industry first by performing the first-ever Signature Verification over the Internet. Since then the technology has been refined and simplified. Standard data packet size today for signature authentication data is not more than 1.5KB, taking usually less than 1/2 second to verify on a LAN. The company is in the process of releasing a new version requiring only 400-600 bytes of transmitted data. This smaller data set will be especially useful in smartcard integration.

In the Sharp Power Zaurus PDAs, Cyber SIGN's technology has two functions, to ensure authenticated remote log-on to a company's network, and to prevent unauthorized use of the PDA itself. The company has identified dozens of possible vertical business markets which need secure remote access, including financial, law-enforcement, government, healthcare and more. In fact, Sharp recently sold 5,000 Cyber SIGN Enterprise-equipped PDAs to a major Japanese apartment construction company. Several insurance companies also showing interest.

Cyber SIGN sees the use for its technology multiplying quickly. Already, major consumer products companies Fujitsu and Casio are using Cyber SIGN Enterprise in various products. Security uses abound, including unscrambling individual secure documents, eCommerce security and more. The company licenses its software for integration into client/server and desktop applications using the Cyber SIGN Developer's Workshop.

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BIO-SCIENCE DEVELOPMENT

Fat-Soluble Compound Touted As Cancer Fighter

A joint research team from the School of Bioresources at Hiroshima Prefectural University and Showa Denko KK has synthesized a chemical compound the had demonstrated effectiveness at preventing the spread of cancer. The substance - a modified form of the vitamin C precursor ascorbic acid - has improved ability to enter cancer cells.

In tests on laboratory mice, the new compound proved to be effective at a 30-times lower dose than other vitamin C precursors. The substance also took effect much more quickly. The new compound is a structurally altered form of ascorbic acid, modified in several ways including linkage to palmitic acid, which is a kind of fatty acid.

Several other vitamin C precursors have been synthesized as cancer-fighting agents. However, these tend to be highly water-soluble and incompatible with fats. In contrast, the new compound is soluble in fats and thus readily enters cancer cells because the ascorbic acid is attached to a fatty acid molecule.

After the new compound enters a cancer cell, it is converted into vitamin C, which acts to prevent the cells from metastasizing, or spreading, to unaffected tissues in the body. Vitamin C also supports the activity of cancer-fighting genes. In experiments with mice, the new compound prevented more than 95% of cancer cells from spreading to the lungs even at extremely low doses.

Moreover, the new compound began to demonstrate effectiveness just one hour after administration, compared with the 18-hour lag time for comparable substances. The fact that the new compound works at far lower dosages while still being effective at preventing metastasis means that there is less chance of undesirable side effects, such as the destruction of healthy cells. VitaminC precursors administered in high concentrations will enter and damage normal, healthy cells as well as cancer cells.

Micromachines Can Handle Turbine Repairs, Blood Clots

Research and development work on micromachines carried out as a joint public-private sector effort has started to pay off in terms of tangible results. A project supported by the Ministry of International Trade and Industry has yielded a micromachine, developed by Olympus Optical Co., which is designed to inspect and repair machinery such as steam turbines without having to disassemble them.

The MITI project has also produced Terumo Corp.ís catheter that can burn through blood clots by going into blood vessels. Olympusí prototype micromachine takes the form of a long 8mm-diameter tube. At one end of the tube, there is a CCD camera and two ultra-compact welding arms with a thickness of only 3mm. Since the tube can be bent at will by the operator using an air-pressure-based controlling mechanism, the micromachine is capable of feeding the image of almost any desires spot via the CCD camera.

New Pressure Sensor Boasts Enhanced Sensitivity

Everyone knows a good caregiver should be sensitive to the needs of others, but what about robot caregivers? A newly developed pressure sensor is pliant like the skin and sensitive enough to correctly detect even the lightest touch. This would give robots just the sensitivity they need to find employment in the health-care profession, which holds promise of rapid growth in the next century.

Other potential applications include high-performance sensors for automotive and computer uses. The new pressure sensor weds the sensor technologies of Inaba Rubber Co. in Osaka with the ceramics technologies of the Osaka University Institute of Scientific and Industrial Research.

The device is an example of a nanocomposite, that is, a composite made by mixing different materials at the microscopic level to create a new material with unique properties. In this case, tiny beads of carbon ranging in diameter from 1 micron to 10 microns and particles of an alumina-type ceramic around 20 nanometers in diameter are mixed into silicone rubber melted in a crucible. (A micron is one-millionth of a meter; a nanometer is one-billionth.)

Silicone rubber is not conductive, and the nanocomposite at rest will not allow an electric current to pass. The carbon particles do conduct electricity, however. So when pressure is applied and the composite deforms and carbon particles come into contact with one another, they form a pathway for the flow of electricity. This is the mechanism used by the pressure sensor to signal that it has touched or been touched by something.

The alumina particles help disperse the carbon particles more evenly throughout the silicone rubber, making the flow of current more stable and boosting the sensitivity of the sensor. At the same time, the alumina helps preserve the flexibility and the elasticity of the rubber.

This is not the first time a pressure sensor has been developed by mixing conductive particles into rubber. But rubber tends to harden over time and change its characteristics, making it difficult to produce reliable sensors. Another problem is that the stiff rubber needs to be loosened up before it can be used, so it is not practical to incorporate the sensors on industrial production lines.

The new pressure sensor can detect contacts across a continuous range of forces, from a very light touch to strong pressure. When the pressure is relaxed, the device returns to its original shape. In addition, the sensor can be processed into both flat and rounded shapes.

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ENVIRONMENT

New Paper, Pulp System Cheap, Green

Nippon Paper Industries Co., Asahi Glass Co. and Kawasaki Kasei Chemicals Ltd. have developed a landmark pulp-producing process that pushes up production yields and reduces by some 70% the amount of liquid waste generated during production. Nippon Paper plans to build by next year in Hokkaido a commercial plant using the new system.

Compared with conventional pulp production, the process uses 5% less wood chips and virtually eliminates the possibility of the generation of dioxin or other harmful chemicals. It combines the pulp-producing technology of Nippon Paper, the ion-exchange membrane-electrolysis technology of Asahi Glass and the chemical-enhancement technology of Kawasaki Kasei. The system also used ozone to bleach the pulp instead of chlorine and reuses the liquid drained off in the bleaching process.

Some 1.4 million cu. Meters of wood chips could be saved annually if all domestic pulp production were switched to the new system, Nippon Paper estimates. This figure translates into 70,000 hectares (173,000 acres) of forest. It costs about 1.5-2 billion yen to set up a new system with daily production capacity of 1,000 metric tons, but the savings accrued from the system amount to 500 million yen annually, the companies claim.

The three companies will set up a joint venture ad are looking to sell plant equipment used in the process to domestic and foreign manufacturers.

JR Eastís Green Record Catches Investorís Eye

East Japan Railway co. (JR East) is reinforcing its efforts in environmental fields. The company has been chosen by UBS (Trust & Banking) Ltd., a Tokyo-based subsidiary of UBS AG of Switzerland, known for its track record in eco-funds, as an investment outlet, following Honda Motor Co. ad Sony Corp. among Japanese corporations.

JR East exceeds all other Japanese railway operators in environmental preservation measures. It introduces new rolling stock to prevent global warming, recycles waste collected from stations and procures environmentally friendly materials. A board indicating how to sort waste generated during work processes hangs in the Niitsu Rolling Stock Plant of JR East in Niigata Prefecture.

The plant obtained the ISO 14001 distinction, an international standard for environmental control systems, this February, the first such distinction by a work-site division of a Japanese railway company. JR East set up the Committee on Ecology in April 1992. It set concrete numerical targets, including emissions of carbon dioxide, and made them public in its environmental report in 1996. It also set up recycling centers in various locations to sort garbage collected from stations and cars.

The reason for the railway companyís stance toward environmental preservation is simple. Environmental measures are on a different level from improvement of corporate image. For instance, the firmís 39-page environmental report does not contain articles labeling the company an ìenvironmentally friendly railway.î JR East spends on average just under 90 billion yen a year on safety measures, including repair of signal systems, but it cannot expect the 90 billion yen to necessarily boost sales.

Behind the environmental attitudes is a bitter experience before the privatization of the company, when the now defunct Japanese national Railways was forced to sped some 200 billion yen because of noise from its bullet trains. The stock market values JR East highly. Many analysts believe that progress in green measures taken by a corporation now will pay off in profits in the near future.

Ishikawajima-Harima Recycles Plastics

Turning from bridges and ships to more humble products, Ishikawajima-Harima heavy Industries Co. has begun making solid fuel from used plastics at a plant in Chita, Aichi Prefecture. The company is also set to start the intermediate processing of used plastic containers and consumer-electronics products next year at a former plant site in Nagoya.

Ishikawajima-Harima sees this a golden opportunity to diversify from the heavy-equipment business, as local governments are outsourcing more of their waste processing. The companyís restructuring plan calls for developing its recycling operation into a major profit center alongside aircraft engines. The Chita Plant was suffering from slowing bridge orders.

From September, the plant began making recycled plastic fuel with used plastics collected from home-appliance makers and print shops in central Honshu, Japanís main island. The company set up a joint venture with a Saitama Prefecture solid-fuel maker and installed fuel-production facilities within the compounds in Chita at a cost of 500 million yen ($4.8 million).

The plant crushes and presses used plastics to turn them into pellet. The fuel, convenient for transport and storage, generates calories comparable to that of coal. The fuel will be supplied to steelmakers and other manufacturers. The company aims to boost its processing capacity to 1,000 metric tons a month in the spring and plans to add more facilities when the operation gets into full swing. It is also considering handling other types of used plastics.

In September, a group company won a contract from the Nagoya municipal government for the packaging and storage of used plastic containers. Recycling of such containers will become mandatory under a new law that comes into effect in April. The Nagoya plant has a daily processing capacity of 200 tons. The company will start accepting used plastics from August 2000. The plastics the company has processed are to be sold for recycling into new products.

The company also aims to set up a facility to process used home appliances in view of a law that will take effect in April 2001 which calls for recycling of designated home appliances. A company called Green Cycle, in which Ishikawajima-Harima owns a 10% stake, will handle the home-appliance processing. The new facility is due to go into operation next spring to process about 150 tons a day collected in the greater Nagoya area.

The three recycling companies will work independently for some time but intend to collaborate to run integrated operations to ship plastics extracted from home appliances and containers for recycling into fuel at the Chita Plant, for example. Ishikawajima-Harima officials say that it is difficult to make a profit from the recycling business, so they hope for synergy between the recycling business itself and sale of recycling equipment to be used in environmental conservation.

As the government contracts out waste processing to more private companies, superior expertise on collection and recycling of used materials as well as hardware will become crucial in landing new plant orders. The company aims to double its revenues from its environmental and plant businesses to 170 billion yen between fiscal 1998 and 2003 to make up for sluggishness incinerator orders and tough competition in gasification furnaces for waste disposal.

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SEMICONDUCTOR

Casio, Oki to Set Up Fabless Firm to Develop Microchip Packaging Technologies

Casio Computer Co., Ltd. and Oki Electric Industry Co., Ltd. said they will establish a joint venture on Nov. 15 to develop packaging technologies for next and future generations of microchips. Near-term, the new company will develop a next-generation packaging technology called the Wafer Level Chip Size Package (Wafer Level CSP) and technologies to design and manufacture printed circuit boards using Wafer Level CSP microchips, officials of both companies said.

The new company will be called Integrated Electronics and Packaging (IEP) Technologies Inc. It will be a fabless company that has no production lines and earns profits by licensing its technologies to other companies. Oki will start manufacturing Wafer Level CSP microchips in December 1999 and Casio Micronics Co., Ltd. will do so at the end of 2000.

Wafer Level CSP is a new packaging system for wafers that have undergone upstream processes such as pattern lithography to build up transistors and wiring on them. These wafers also undergo lead-bonding and plastic packaging processes before being cut off into chips. Compared to the conventional packaging system, in which wafers are cut into chips just after the pattern-lithography-related processes, the Wafer Level CSP system offers reductions in chip size and production costs. Also, it is a packaging system suitable for high-speed circuits because it reduces electric loads pertaining to packaging. Despite these merits, the use of microchips with Wafer Level CSP is not disseminated enough to consumer devices, because makers of the devices need special technologies to make PCBs or to mount the microchips. The IEP Technologies will spread the use of microchips with Wafer Level CSP by developing technologies, including those for applications.

Wafer Level CSP microchips to be manufactured by Oki from December 1999 will have a terminal pitch of 0.5mm. The company will use 150-mm (6-in.) wafers. Its production capacity at the first stage will be 3,000 wafers a month. The first application example of Wafer Level CSP microchips will be for Casio's wrist watches slated to begin rolling out in the spring of 2000. Also in the spring of 2000, the wafer size will be extended to a diameter of 200mm (8 in.).

NEC, Hitachi Chip Alliance Set to Expand

Japanese chipmakers NEC Corp and Hitachi Ltd. appear set to step up their ties in dynamic random-access memories (DRAMs) to include joint chip production, as they confront intense global competition and daunting costs. The two companies, which in June announced plans to cooperate in the development of new DRAM chips, have also agreed to consolidate their production and sales of DRAMs by the spring of 2001, the business daily Nihon Keizai Shimbun reported on Monday.

Spokesmen for NEC and Hitachi declined to comment on the report, beyond stating that no decisions had been made on a possible integration of DRAM production. But investors welcomed the idea, driving the shares of both firms higher. Hitachi rose 123 yen or 9.33 percent to finish the Monday session at 1,441 yen, while NEC ended 70 yen or 3.02 percent higher at 2,385.

Intensifying competition with overseas chipmakers, including bigger rivals such as Micron Technology of the United States and South Korea's Samsung Electronics Co, has spurred Japanese chipmakers to seek domestic alliances aimed at easing the heavy financial burden of setting up new production facilities. Two other big Japanese chipmakers, Fujitsu Ltd. and Toshiba Corp, said in late 1998 they would jointly develop one-gigabit DRAM chips by March 2002, and Warburg's Izumi said Mitsubishi Electric Corp might also join an NEC-Hitachi alliance.

Nihon Keizai said NEC's chipmaking subsidiary in Hiroshima Prefecture in western Japan and Hitachi's chip plant in Singapore would be merged into a new fifty-fifty joint venture, scheduled to be established in December, although NEC would continue to produce DRAMs separately at its plants in Scotland and in Kyushu in southern Japan. It also said the two companies were expected to invest 100 to 150 billion yen to build a new plant capable of making chips out of 12-inch wafers, with start-up as early as in 2002.

NEC Developing 1GIPS Microprocessor with Low Power Consumption

NEC Corp. is developing a microprocessor with low power consumption that is expected to perform at one giga instruction per second (GIPS) and consume only one watt of power. Details will be made public at the 2000 IEEE International Solid State Circuits Conference (ISSCC2000) to be held in San Francisco from Feb. 7-9, 2000. The 125MHz microprocessor, based on CMOS technology using a 0.15-micron design rule, has four CPU cores, each of which separately processes a thread.

As each CPU core issues two instructions at one time, the microprocessor can execute a maximum of 8 instructions during one clock cycle. The highest performance of this per-clock processing is 1 GIPS. It operates at +1.3V and consumes one watt of power. There are 14 million transistors integrated on chip. All the components are integrated on a chip area of 10.5mm x 10.5mm.

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SPECIAL SECTION

Fusion Research Spin-Off Makes Solar Cells Less Costly

Budget cuts and years of slow progress aside, nuclear-fusion researchers believe their efforts will eventually result in an economically viable form of clean renewable energy. Some of the advanced technologies developed for fusion experiments have begun showing up in industrial applications. The latest spin-off, courtesy of the Japan Atomic Energy Research Institute, is an inexpensive method for manufacturing single-crystal silicon substrates for solar cells.

Solar cells ae typically made from an amorphous type of silicon. The single-crystal type of silicon has more than twice the energy-conversion efficiency of conventional amorphous silicon, but because the material is so much ore expensive than amorphous silicon it has never found a commercial market in solar cells. The new technology from the instituteís Naka Fusion Research Establishment laboratory could help change all that.

In the new technique, a beam of negative hydrogen ions is shot at a slab of single-crystal silicon, causing a 0.01mm layer of silicon to peel off the top. This layer is 100 times thinner than the single-crystal silicon substrates now used to make solar cells, which means material costs for solar cells potentially could be just 1% of current levels.

The lab plans to cooperate with private companies to make prototype solar cells using these thin substrates; researchers say the same technique might eventually be used to make thin silicon substrates for other semiconductor applications. When a silicon substrate is bombarded with hydrogen ions, the ions reach a certain depth and then turn into a gas, creating pressure that peels a thin layer of silicon off the top of the substrate. This phenomenon, known as delamination, is already being put to commercial use by the French company SOI Tech to manufacture single-crystal silicon substrates. However, SOI Tech uses positive hydrogen ions in its process. While these positive ion beams are easy to make and handle, side effect is the generation of positive metal ions that end up as extraneous impurities in the silicon substrate. Since this interferes with the function of the silicon as a semiconductor, expensive and time-consuming steps must be taken to eliminate the metal ions.

In contrast, the Naka lab uses a beam of negative hydrogen ions, which is generated in a process that does not lead to the creation of positive metal ions, so there is no worry about impurities. Negative hydrogen ions are unstable and very difficult to make. But the Naka lab has more than a dozen years of experience because it used negative hydrogen ion beams to heat the plasma in its fusion-reaction experiments.

The work with single-crystal silicon substrates is still in the early stages of development. So far, the ion-beam system can only work with substrates 10cm in diameter. And the researchers sill have to figure out a way to cleanly peel the thin layers off the top of the substrate.

However, the use of negative hydrogen ion beams promises to be a viable way to mass-produce inexpensive single-crystal silicon substrates for solar cells. The substrates now used for solar cells ae 1mm thick. But with the ion beam technology, 100 layers can be peeled off a single substrate, representing substantial cost savings.

Negative hydrogen ion beam generators do not come cheap, however. According to the institute, the equipment cost around 200 million-yen ($1.9 million). But once substrates can be mass-produced, their cost would become a mere fraction of the manufacturing cost of solar cells. The institute says that if the equipment was used to produce substrates over a period of five years, the cost would translate to just 20 yen per piece.

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STRATEGIC ALLIANCES JAPAN IN THE UNITED STATES

Mitsubishi Electric Establishes Strategic Capital Alliance with TeraLogic

In order to strengthen its digital TV broadcasting business, Mitsubishi Electric Corporation has undertaken a strategic capital alliance with TeraLogic (head office: California), an American company leading in the development of chip sets for digital TV broadcast equipment. Mitsubishi Electric will invest US$ 5 million at the end of November.

Mitsubishi Electric, as part of an opportunity to participate in the testing of domestic ground station digital TV broadcasting, will actively expand its digital TV broadcasting business and plans to pursue outgoing systems, transmitters/repeaters, and receivers. Viewing ground station/BS/CS and the digitalization of CATV, the company intends to expand the business of fusing broadcasting and telecommunications and respond to the future home network age.

For these reasons, the company has established a strategic capital alliance with TeraLogic, a company leading the way in digital image processing technology. Not only limited to Japan, the company will enter the North American and European market, and actively pursue the receiver market while strengthening its relationship with TeraLogic. Concerning future product development, starting from the year 2000, the company plans to offer receivers (set top boxes) that incorporate LSIs and are compatible with ground stations, BS and CS step by step.

Hitachi SuperH Processor Drives New Generation of the HP Jornada Palm-size PC

Hitachi Semiconductor (America) Inc. announced that its SuperHÆ RISC microprocessor powers Hewlett-Packard Company's new HP Jornada 430se Palm-size PC. Hitachi's SH7709A microprocessor drives the HP Jornada 430se Palm-size PC, a small but powerful device integrating business and entertainment functionality, based on the Microsoft WindowsÆ CE operating system.

The HP Jornada 430se Palm-size PC is designed around Hitachi's SH7709A CPU, which at 133 megahertz, is the fastest processor to be designed into any palm-size PC. By utilizing the SH7709A CPU, the HP Jornada 430se Palm-size PC delivers excellent battery life while offering the performance needed to run multimedia applications such as MP3 player software.

In addition, the HP Jornada 430se Palm-size PC also features a 65,536-color display, digital imaging software and the ability to listen to the news or a book -- all while the user is mobile. The HP Jornada 430se Palm-size PC provides 16MB of RAM and a CompactFlash Card Type II slot which enables users to insert industry-standard CompactFlash hardware such as storage cards, modems and barcode scanners.

The HP Jornada 430se Palm-size PC's new travel synchronization/charging cable allows users to synchronize information with their PCs and recharge the battery without carrying a docking cradle. Hitachi's SuperH processors power a broad range of Windows CE devices, from low-power-consumption portable products, to information appliances, to high-performance, multimedia-oriented devices such as the Sega Dreamcast(TM) game player, to the auto PC.

The SH7709A CPU is part of the popular SH-3 family of RISC processors, which is designed to meet the demanding price/performance and power consumption targets of sophisticated consumer and embedded electronics. Hitachi provides the most complete line of off-the-shelf processors, companion chips and reference platforms for Windows CE, which enables OEMs to reduce their time-to-market.

Short News

  • Fujitsu Ltd. will help Visteon Automotive Systems, and automotive supplier of the ford Motor co. group, to develop a computer-aided engineering system. The system, to be built using hardware and software for Fujitsu, will boost efficiency in designing components for use in automotive air-conditioning systems.
  • Kuroda Precision Industries Ltd. in April will unify on a worldwide basis its brands for pneumatic equipment with those of U.S. air-compressor manufacturer Parker Hannifin Corp. Japanís leading air-compressor manufacturer was brought under the umbrella of the U.S. company in the summer, when Parker acquired a 33.5% stake in Kuroda.
  • KDD Submarine Cable Systems Inc. (KDD-SCS), a wholly owned subsidiary of KDD Corp., has signed a multiyear contract with U.S.-based Corning Inc. to buy optical fiber for undersea cables. KDD-SCS has bought the fibers only from Japanese suppliers until now, but the continuing strength of the yen has made it more cost-effective to use overseas suppliers.
  • Kyorin Pharmaceutical Co. has tied up with Merck & Co. to provide the U.S. drug maker with development and sales rights to a new diabetes treatment. KRP-297 is an insulin sensitizer that also corrects certain lipid abnormalities. Merck, which has not offered a major diabetes drug before, will develop and sell the product worldwide in areas outside East Asia.
  • NEC Corp. will supply AT&T with its wavelength division multiplexing system for transmitting data on fiber-optic lines. AT&T is expected to pay about $300 million this fiscal year for the system, while the total deal will be worth an estimated $1 billion over three years.
  • Sharp Corp. later this month will begin shipments to the U.S. and Europe of handheld digital-versatile disc (DVD) players with liquid-crystal displays. The company will double production at its plant in Tochigi Prefecture to 6,000 units per month.
  • Toyota Motor Corp. has decided to invest about 30 billion-yen to build a second factory at its Indiana plant in order to increase production capacity in North America. The automaker already has an annual manufacturing capacity of 1.25 million vehicles on the continent.
  • Itochu Corp. has begun marketing in the U.S. a feed-use additive developed by Calpis Co. The product, Calsporin, is a probiotic, that is, a beneficial bacteria product. The additive reportedly reduces harmful bacteria, such as salmonella, in the intestines of livestock, improving livestock productivity and making meat and egg products safer.

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STRATEGIC ALLIANCES THE UNITED STATES IN JAPAN

TeraLogic Establishes Japan Office

TeraLogic, Inc., the leading developer of technology solutions for digital television applications, today announced the establishment of TeraLogic Japan, a wholly owned subsidiary to be headquartered in Chiyoda-ku, Tokyo. The formation of TeraLogic Japan will enable the company to provide more support for its growing number of OEM customers such as Mitsubishi, NEC, Sanyo and Toshiba. It will also allow them to maintain a stronger relationship with strategic partners including ACCESS and Kenwood.

The opening of TeraLogic Japan demonstrates the company's dedication to the Japanese market. TeraLogic is currently shipping its ICs (TL850 and TL750) and development platforms (Cougar and Janus cards) to customers in Japan. For several years, TeraLogic has been an active member in digital TV (DTV) standards organizations in Japan, including ARIB and the DVD Forum. In addition, the company recently joined the Digital Satellite Broadcasting Reception System Test Center Consortium to ensure that TeraLogic's technology will be compliant with BS Digital Broadcasting System requirements. TeraLogic has been working with Marubun Corporation, one of Japan's largest electronics distributors, since 1996.

TeraLogic Japan will make its debut at InterBEE '99 (The International Broadcast Equipment Exhibition 1999) in Makuhari, Japan from November 17-19. TeraLogic and Marubun Corporation will hold meetings and demonstrations of their Japan-centric technology at a suite in the Makuhari Prince Hotel.

SmartForce and NTT Form Strategic Relationship

SmartForce, the e-Learning company, announced today that it has formed a strategic relationship with a division of Japanese telecommunications firm Nippon Telegraph and Telephony (NTT) to introduce SmartForce e-Learning to Japan. The relationship, designed to bring the emerging e-Learning market to a Japanese audience, will include Japanese-language versions of SmartForce's Microsoft Windows 2000 Certified Systems Engineer (MCSE), Cisco, Lotus Notes and Windows 98 courseware.

Through its Information ``Xing'' (crossing) division, NTT plans to market the translated courseware to large Japanese systems integrators, Japan's thriving corporate IT community and NTT employees. In effect, the relationship will give Japan its first comprehensive, localized access to IT e-Learning courseware.

In accordance with the relationship, SmartForce, formerly CBT Systems will immediately provide all titles already translated to Japanese, including Lotus Notes and Windows 98 courseware. The first installments of MCSE Windows 2000 courseware will be available in Japanese in late December. Further MCSE Windows 2000 courseware will be added throughout 2000. Cisco courseware will be available by early 2000.

SmartForce redefined the computer training industry on Oct. 19 when it unveiled SmartForce e-Learning, a first-of-its-kind, fully integrated e-Learning solution. As businesses and individuals turn more and more to the Internet - more than 320 million people are expected to be online by 2002 - SmartForce's e-Learning program is designed to be the solution for the Internet Economy, both in the United States and globally.

Short News

  • NTT Mobile Communications Network Inc. (NTT DoCoMo) and Microsoft Corp. are set to form a 50-50 joint venture called Mobimagic to offer corporate clients electronic mail and other telecommunication services via cellular phones and other portable hardware.
  • Microsoft Co. plans to hire 200 experienced information-technology consultants during the current business year through June 2000. The Japanese unit of the U.S. software giant hopes to expand its solution-service operations for large corporate clients.
  • Costco Wholesale Japan plans to open its second membership outlet in Makuhari, Chiba Prefecture, in December 2000. The local subsidiary of the largest U.S. operator of membership warehouse stores, says the new outlet will have a sales floor of 15,000 sq. meters, handling 4,000 items, including food and electric appliances.
  • Enron Corp., a Texas-based comprehensive energy company, has established a subsidiary in Tokyo and started surveying the market as it looks into wholesaling and retailing electric power in Japan. With an eye on next springís deregulation of retail electric-power sales to large-lot users, overseas energy firms are moving into the Japanese market.
  • Nihon Unisys Ltd. and BEA Systems Japan Ltd., which deals in middleware, have formed a marketing agreement to expand their business in corporate systems utilizing Internet technologies. The partners plan to create mainline products by developing advanced systems that combine BEA Systems Japanís application server software with the Java programming language.

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Contact Information: Morgen, Evan & Company, Inc. Copyright 1999