Subject: [NEXTEL-1] Sanyo to Boost Production of Chips for Camera-Phones

From: Marcel <[email-masked]>
Date: Wed, 22 Jan 2003 16:36:08 -0500

Sanyo to Boost Production of Chips for Camera-Phones

Japan's Sanyo Electric said it will increase production of the charge-coupled
device chips used as electronic film in camera-phones and digital cameras to 50
million a month by early 2004, up from 10 million at the end of 2002. The
company is also working with Eastman Kodak to make brighter, thinner screens
for cell phones

Sanyo Joins Japan Rush to Catch Camera Phone Wave
Tue Jan 21, 4:28 AM ET

By Edmund Klamann

TOKYO (Reuters) - Sanyo Electric Co., Japan's third-largest consumer
electronics maker, said on Tuesday it would spend 45 billion yen ($380
million) over three years to boost production of chips used in
camera-equipped mobile phones.

Sanyo is one of a slew of Japanese high-tech
manufacturers, from component maker Murata
Manufacturing Co. to chipmaker Toshiba Corp.,
that plans to catch the rising wave of popularity
for photo-snapping handsets.

"Nobody thought camera phones would take off
like this," Sanyo Electric President Yukinori
Kuwano told reporters.

Sanyo also announced last week that a joint
venture with Eastman Kodak would spend 20
billion yen in the next business year to start making a new type of cellphone
screen, using organic light-emitting diodes (OLEDs), that are brighter and
thinner than liquid crystal displays.

Kuwano said he expected a decision in the next few months on the roll-out
of the first OLED-screen cellphone.

Sanyo also plans to boost its production capacity for charge-coupled
devices (CCDs), chips used as "electronic film" in digital cameras and
photo-taking cellphones, to 50 million units a month by spring 2004 from 10
million at the end of last year.

GETTING THE PICTURE

Sanyo's assault on these high-growth and potentially high-margin sectors
comes as profits in its home appliance division take a beating from
lower-cost producers in China.

Sanyo's home appliance division posted a 5.5 billion yen operating loss in
the first half of the business year from April and the company announced
plans in November to shift manufacturing of air conditioners and other goods
overseas.

Sanyo was also forced to cut its profit targets, sending its shares to a
two-decade low of 264 yen in mid-November.

(Story continues after advertisement)

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Sanyo's shares ended Tuesday trade unchanged at 353 yen,
underperforming a 1.36 percent rise in the Tokyo Stock Exchange's
electrical machinery index.

Sanyo has been lagging its peers, shedding 43 percent of its value since the
start of last year compared with a 22 percent drop in the electricals' index
and a 15 percent fall for Sony Corp (news - web sites), the world's largest
consumer electronics maker.

But the company hopes camera phones and other cutting-edge devices will
spark a comeback.

There are already more than 15 million camera phone users in Japan, where
Vodafone Group's J-Phone Corp pioneered wireless services for sending
photos via the Internet.

MARKET SENSORS

Sanyo aims to ship 8.4 million handsets in the business year to March, a
nearly 50 percent rise, with further growth to 10 million units targeted for
next year with help from new handsets recently unveiled for U.S. carrier
Sprint PCS.

That would still be a tiny share of the total global market, which is expected
to exceed 400 million units this calendar year.

Sanyo, which claims a more than 50 percent share of the market for
image-catching CCDs used in camera phones, aims for global CCD sales of
100 billion yen in the 2005/06 business year, up from this year's 17 billion
yen.

Kuwano declined to give any profit targets.

Other electronics companies in Japan, home to all of the world's major CCD
makers, are also boosting output of the chips.

Sony, the world's largest CCD manufacturer, plans to raise capacity to 4.6
million chips per month by the end of March, from 3.5 million, and expects
to exceed its initial CCD production target of 70 billion yen for 2002/03, a
spokesman said.

Most of Sony's CCDs, however, are higher-end chips with millions of pixels
for digital still cameras and camcorders.

In camera phones, CCDs face competition from sensors made with the
complementary metal oxide semiconductor (CMOS) process used for the
vast majority of microchips.

Camera phone makers initially preferred CMOS sensors for their low power
consumption and low cost, but Sanyo's success at cutting power use
spurred many to switch to CCDs, which offer better sensitivity to light and
superior picture quality.

CMOS sensor manufacturers like U.S.-based Micron Technology Inc are
fighting back, however, vowing to boost picture quality to match CCDs.

($1=118.01 yen)

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030121/tc_nm/tech_japan_sanyo_dc_1

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