Hunet Licenses FS LCD Technology to Samsung SDI
Samsung Aims to Become Cellular Phone Leader
Shakeout of Japanese Semiconductor Industry Continues
Sanyo Electric Sues BYD for Patent Infringement in Li-ion Battery
Minolta and Fujitsu Establish IT Outsourcing Firm
Sony Markets PDP TVs in Europe

Hunet of Japan has decided to license its proprietary Field Sequential (FS) LCD technology to Samsung SDI of South Korea, permitting FS to be used in a mass production environment. According to reports in the Japanese trade press, Samsung SDI will produce 20 million LCD panels annually for application in cellular phones using Hunet’s technology starting in 2003. Hunet has been trying to commercialize its Field Sequential technology for about four years, so the deal with Samsung SDI represents a major potential breakthrough.

The Field Sequential method displays an image by sequentially lighting tri-color light-emitting LEDs. Compared to conventional LCDs, which employ color filters, FS LCDs are brighter and capable of displaying images with finer resolutions. FS LCDs have nine times greater pixel density than conventional LCDs, and are suitable for displaying video. Hunet, whose core business is the construction and sales of houses, acquired an LCD startup in 1998. In 2000, Hunet secured an investment from a major LED manufacturer, Toyoda Gosei, and the firm has been trying to expand its LCD business ever since. As Hunet does not own a manufacturing plant, it has been seeking a licensee for its technology and has been in discussion with multiple foreign and Japanese LCD manufacturers.

Samsung SDI is the display products manufacturing firm within the Samsung Electronics Group. It is the second-largest producer of small-format (2-inch class) LCDs in the world. The company will primarily produce FS LCDs for Samsung-branded cellular phones and PDAs.

According to reports in Japan, when Hunet discussed potential licenses for FS technology with Japanese LCD firms, they proceeded with caution. Samsung SDI, by contrast, jumped on the deal. In an ironic development, a display technology first invented in Japan will thus blossom in South Korea. [M. Robertson, Portelligent]

Executives of the Samsung Group met in Seoul on September 18, 2002, to determine mid-term operating goals for the company’s electronics unit. In addition to semiconductor memory devices and TFT-LCDs, segments where Samsung is currently the world leader, the company also seeks to achieve the number one position in "system LSIs" (Systems-on-Chip) and cellular phones, according to reports in the Asian trade press. The Semiconductor Memory Division of Samsung Electronics plans to boost its share of the flash memory market from the current 16 percent to 34 percent by 2005. As for TFT LCD, the company hopes to maintain better than a 20-percent share of the world market, by focusing on non-PC products such as LCD TVs. As for cellular phones, the goal is reported as a 14-percent share of the world market, up from the current 10 percent. In System-on-Chip, the company will concentrate on the development of new technologies and products. Samsung plans to invest aggressively to achieve these goals. [M. Robertson, Portelligent]

On September 22, 2002, the Japanese financial daily Nihon Keizai Shimbun reported that Toshiba and Fujitsu had decided to postpone making a decision on merging their semiconductor operations. The two firms first announced, in June 2002, that they would undertake a comprehensive collaboration in their semiconductor manufacturing operations, with emphasis on system-on-chip technologies. The two firms were also to create concrete plans by September 2002 for joint development of system-on-chip designs, and for the sharing of legacy design technologies. Discussions between Toshiba and Fujitsu have also addressed a possible wholesale merger of their semiconductor operations.

In the merger negotiations, Toshiba, which has a larger semiconductor business than Fujitsu, has taken the position that it wants to hold over a 50-percent share in the new joint venture. Fujitsu is hesitant about ceding this level of control over a core operation to Toshiba. The two firms have thus decided that they need more time to decide whether and how to merge their semiconductor operations.

On September 25, 2002, Nihon Keizai Shimbum further reported that Mitsubishi Electric has entered final negotiations toward a merger of its DRAM operation with Elpida Memory, an NEC and Hitachi joint venture in DRAM. NEC and Hitachi established Elpida Memory in December 1999, as a 50-50 joint venture. It is likely that Elpida will acquire Mitsubishi Electric’s DRAM development and sales operation for 2 to 3 billion yen ($16.67-25 million @ yen 120/$US 1). The companies plan to reach an agreement, including buyout terms and conditions, by mid-October 2002.

During the 1980s there was a time when the six major Japanese semiconductor firms taken together held 80 percent of the world’s DRAM market. If Elpida absorbs Mitsubishi’s DRAM unit, however, it will stand as the only surviving domestic DRAM maker in Japan. [M. Robertson, Portelligent]

Sanyo Electric’s U.S. subsidiary, Sanyo Energy (USA) Corporation has filed a lawsuit against BYD Company, Ltd., a Chinese battery manufacturer, and its U.S. subsidiary BYD America Corporation, in Southern California’s Federal District Court. The suit concerns alleged infringement of Sanyo’s U.S. patents on Li-ion secondary batteries, in particular, U.S. patents number 5,686, 138 and 5,976,729. Sanyo is asking for a ban on import of BYD’s Li-ion batteries to the U.S. market, and for financial damages on sales of them that do take place in the U.S.

Both of the patents in question are basic patents concerning the structure of Li-ion batteries. Sanyo’s battery technologies are primarily applicable to cellular phone and notebook PC battery packs.

Sanyo has licensing agreements on these patents with multiple battery suppliers around the world. [M. Robertson, Portelligent]

Minolta - the Japanese camera manufacturer - and Fujitsu, Ltd., announced on September 25, 2002 that two firms had jointly established an IT outsourcing services firm.

The new company, to be called Famous, will be headquartered in Osaka. Minolta will own 60 percent of Famous and Fujitsu 40 percent. The new firm, which will begin operations on October 1, 2002, will provide IT-support services on an outsourced basis to Minolta group firms. The scope of services is to include consulting on how to utilize information technology strategically and to advancement the efficiency of Minolta’s use of information technology. Famous will engage in improvement of information technology services for the Minolta group, optimization of its information technology investment, as well as the development of new systems.

In terms of staffing, Famous will draw heavily on Fujitsu employees who have been rendering IT services to Minolta in the past. The concept is to leverage the domain specific information systems know-how accumulated by Fujitsu’s work with Minolta in the past, together with the more generic capabilities of its sales force and technical staff. In the beginning, services to Minolta will form Famous’s core business. However, the plan is to gradually expand these services to other customers. Famous seeks to generate 50 percent of its revenues from other firms within five years. [M. Robertson, Portelligent]

Sony has begun marketing 32- and 42-inch PDP televisions in Europe. According to reports in the Japanese trade press, Sony will also produce PDP TVs at its Barcelona plant in Spain, where the company has been producing Braun tube TVs and projectors. This will represent the first time that Sony has produced PDP TVs outside of Japan. From Barcelona, Sony will ship PDP TVs to all the countries in the EU. The firm plans to produce about 10,000 PDP televisions for the European market in the latter half of 2002, and hopes to score big in Christmas sales, by establishing highly responsive delivery mechanisms. Sony estimates that European PDP TV demand will grow 2.8 times in fiscal year 2002 (April 2002 to March 2003), to 80,000 units. While Pioneer and JVC are already actively marketing their PDP TVs in Europe, Sony believes it has greater name recognition and can compete advantageously in the market.

Sony, which was late entering the PDP television market, sold only 10,000 units in Japan and abroad combined in fiscal 2001. In fiscal 2002, however, Sony has a sales target of 80,000 units, with over half to be sold outside Japan. Sony thus hopes to achieve a 20-percent market share in PDP television sales outside Japan in the near term. [M. Robertson, Portelligent]