Toshiba nuclear write-off. BBC interview about Toshiba’s latest nuclear industry write-offs

Toshiba crisis

Toshiba is expected to announce write-off provisions on the order of US$ 6 billion today

Toshiba is on Tokyo Stock Exchange warning list for possible delisting in March 2017

This morning 7:30am I was interviewed on BBC TV Asia Business Report about an update of Toshiba’s ongoing crisis, which has been 20 years in the making.

Here some notes in preparation for my interview.

What is Toshiba’s situation now?

Toshiba’s market cap today is YEN 1024 billion = US$ 9.6 billion.
Toshiba is expected today to announce write-off provisions on the order of US$ 6 billion.
Toshiba owes about US$ 5 billion to main banks as follows:

Mizuho YEN 183.4 billion
SMBC YEN 176.8 billion
Sumitomo Mitsui Trust Holdings YEN 131.0 billion
BTMU YEN 111.2 billion
Total YEN 602.4 billion = US$ 5.3 billion

Toshiba is on notice for delisting by the Tokyo and Nagoya Stock Exchanges, and faces the risk of being delisted by March 15, 2017, i.e. in about 4 weeks from now.

Toshiba is trying to raise capital e.g. by seeking investment in the IC/flash memory division, however, Toshiba seeks to keep control, so Toshiba is trying to raise a minority share, or non-voting shares or similar, in order not to lose control.

How did Toshiba get into a situation to potentially need to write off US$ 6 billion?

Toshiba acquired 87% of the US nuclear equipment manufacturer Westinghouse.

While Westinghouse is a famous name, what Toshiba actually acquired seems to have gone through a period of restructuring.
For an analysis see “Westinghouse: Origins and Effects of the Downfall of a Nuclear Giant”, in the World Nuclear Industry Status Report: https://www.worldnuclearreport.org/Westinghouse-Origins-and-Effects-of-the-Downfall-of-a-Nuclear-Giant.html

In 2015 Toshiba acquired the construction company SHAW’s assets from the Chicago Bridge & Iron Company CB&I for US$ 229 million plus assumed liabilities. CB&I had acquired SHAW for US$ 3.3 billion in July 2012, and SHAW has on the order of US$ 2 billion annual sales.

Why did Toshiba acquire a company for US$229 million, which has US$ 2 billion annual sales, and which was in 2012 acquired for US$ 3.3 billion? Which factors reduced the value of this company from US$ 3.3 billion to US$ 229 million within the 3 years from 2012 to 2015?
Presumably because there are large liabilities arising from nuclear construction, which Toshiba now seems to have to assume.

Cost overruns and delays are not uncommon in the nuclear industry. Similar issues happened with a Finnish nuclear reactor recently, see: https://en.wikipedia.org/wiki/Olkiluoto_Nuclear_Power_Plant

What is likely to happen now with Toshiba? Is Toshiba too big to fail?

Difficult to say what will happen. Toshiba is a huge corporate group with about 200,000 employees and many factories in many countries, so clearly Toshiba is not going to disappear without trace.

The immediate risk is that Tokyo Stock Exchange carries out its warning, and delists Toshiba, which will further increase Toshiba’s ability to raise capital. In the case of a delisting, private equity, and/or government might invest and restructure, and Toshiba might be split up. For example, Toshiba’s nuclear Westinghouse division is totally separate from its very successful flash memory division, there is not much business logic in having both under one holding company.

Impact on UK

Toshiba acquired 60% of UK based NuGeneration with the view to build nuclear power stations in the UK. This project requires Toshiba to contribute to the funding of the nuclear project, for which Toshiba would probably need a financially healthy partner.

What is the big picture? How did Toshiba get into this crisis?

Toshiba’s crisis has been building up for 20 years, and is in my view a consequence of corporate governance issues over a long time.

Essentially, Toshiba should have been reformed 20 years ago from the top down.

Japan’s 8 electronics giants have had essentially no growth and no profits for 20 years. This tragedy has been obvious for many years now, and was a big contributing factor for Japan’s government to reform Japan’s corporate governance laws and regulations, see:

Toshiba’s Board of Directors was exchanged in September 2015, and now includes several very capable and experienced Japanese independent Board Directors, but unlike Hitachi, even today neither Toshiba’s Board of Directors, nor Toshiba’s Executive Board include one single foreigner. 

One might think that a huge global group like Toshiba with complex businesses around the globe might benefit from a variety of view points and experiences from different countries at Supervisory Board and Executive Board level – not all just from one single country. Japanese corporations including Hitachi, SoftBank, Nissan and a small number of others are now recognizing the benefits of diversity of experience and viewpoints at Supervisory Board and Executive Board level.

We can only hope that Toshiba’s executives and Board Directors have the experience and ability to solve the extremely complex issues deep inside the bowels of the US nuclear construction industry – far away on the other side of the world.

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Pokemon Go – everybody loves Pikachu…

Pokemon Go is great – but will it bring another Nintendo boom as in 2009? or even exceed 2009?

Pokemon Go is great – but will it bring another Nintendo boom as in 2009? or even exceed 2009?

Google spin-out Niantic Labs’ augmented reality smartphone game booms to the top of charts

Niantic Labs is specialized on augmented reality games. In a previous game, Ingress, players selected about 15 million memorable locations globally. Niantic picked about 5 million of these crowd source generated locations, placed characters out of 740 Pokémon characters at such Pokéstops. Using smartphones, GPS, cameras and their avatars, players hunt Pokémon characters placed at Pokéstops, bring them to arenas/gyms and let their Pokémon characters fight for arenas/gyms. Thats just the beginning, and we can imagine many ways to expand this basic game structure, for example Pokéstops and Gyms sponsored by stores or corporations.

Overcoming Galapagos

Pokémon Go’s success is also significant, because the fundamentally Japanese Nintendo and The Pokémon Company are overcoming the Japan-Only Galapagos Syndrome by cooperating with Google and San Francisco based Google spin-out Niantic.

At the same time, Pokémon Go is also an indication of the power Nintendo can achieve in the smart phone sector. Will Nintendo dethrone current smart phone game kings Mixi and Gung-Ho in Japan?

Everybody loves Pikachu… No. 25 of currently 740 Pokémon characters

For the open day at my older son’s high school, kids made posters introducing their country: the highest mountain, the most characteristic flower, and the most famous person.

One Japanese student writes: “The Prime Minister is the most famous person in Japan, because he decides everything”.

Another Japanese student writes: “Pikachu is Japan’s most famous person, because everybody loves Pikachu”. Which of the two Japanese students knows more about his own country?

Pikachu is No. 25 of currently 740 Pokémon characters, and represents electricity with his zig-zag lightening bolt tail, and bright yellow color.

Pokémon character developer The Pokémon Company estimates the global market for Pokémon characters to be US$ 48 billion.

Nintendo market cap increases from US$ 20.3 billion to US$ 31.5 billion from 6 to 13 July, 2016

Nintendo shares rise from ¥14,055 in the morning of July 6, 2016 to ¥21,830 at close on July 13, 2016

Nintendo market cap rises from ¥ 2.56 trillion (US$ 20.3 billion) in the morning of July 6, 2016 to ¥ 3.09 trillion (US$ 31.5 billion) at close on July 13, 2016

Nintendo boomed around 2009 by disrupting the game world with motion sensing Wii and two-screen handheld DS game consoles. Smartphone disruption reduced Nintendo to pre-2006 size in sales, and profits did not yet recover to pre-boom levels.

Nintendo revenues peaked in 2009, and are now back to where they were before 2006
Nintendo revenues peaked in 2009, and are now back to where they were before 2006
Nintendo income peaked in 2009, and just recently recovered from losses - has not yet reached pre-2006 levels
Nintendo income peaked in 2009, and just recently recovered from losses – has not yet reached pre-2006 levels

Unexpected consequences- The Bank of Kyoto booms, and Bank of Kyoto’s 4.5% holding in Nintendo is worth more than 1/2 of Bank of Kyotos market cap

The Bank of Kyoto owns 4.5% of Nintendo, at close on July 13, 2016, this holding is worth YEN 139 billion (US$ 1.4 billion).

The Bank of Kyoto (TSE Code 8369) at the close on July 13, 2016 has a market cap of YEN 274 billion (US$ 2.64 biliion)

Thus Bank of Kyoto’s holding in Nintendo corresponds to more than one half of its value. This also means that Nintendo is worth about 10 times as much as the Bank of Kyoto.

The Pokémon Company – global market size estimate for Pokémon characters estimate: US$ 48 billion

The Pokémon Company manages and develops the currently 740 Pokémon characters.

The Pokémon Company is a private company owned in equal 1/3 parts by Nintendo KK, KK Game Freek and KK Creatures. KK Game Freek and KK Creatures are both privately held game development companies

More details and analysis in our Report on Japan’s game markets and makers.

Niantic Labs

Niantic Labs, focused on augmented reality games, is a Google spin-out founded in 2010, headed by John Hanke, one of the founders of Keyhole, which is at the basis of Google Earth.

Niantic Labs had staged initial funding of US$ 90 million equally from Google (1/3), Nintendo (1/3) and The Pokémon Company (1/3), and since then an additional Series A round in February 2016, plus we assume that Founder John Hanke, maybe Google at spin-out, other founders likely also own equity. So its not clear to us how much exactly Nintendo owns of Niantec, either directly or via its holding in the Pokémon Company.

There was a augmented reality company in Japan, Tonchi-Dot 頓智ドット株式会社(トンチドット) which created a augmented reality app called Sekai-Camera during i-Mode and Galake-Phones, but it ended all services on January 22nd, 2014.

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Shuji Nakamura on 2nd and 3rd Generation Solid State Lighting

Shuji Nakamura

Shuji Nakamura’s invention to save energy corresponding to about 60 nuclear power stations by 2020

2nd and 3rd Generation Solid State Lighting

For Shuji Nakamura’s invention of high-efficiency GaN double-heterostructure LEDs he was awarded the Nobel Prize in Physics 2014, while his employer sued him in the USA for leaking intellectual property – Shuji Nakamura won this court case, and his employer lost the case. To defend himself and his family, Shuji Nakamura countersued in Japan, and the Japanese court awarded Shuji a substantial award in a settlement. Shuji shared some insights into the comparison of IP lawsuits in US vs Japan with us at the 8th Ludwig Boltzmann Forum.

Shuji moved to the University of California Santa Barbara, and is now building the company Soraa in Silicon Valley with investments from major US VC funds. Soraa may already be or is likely to be soon much bigger in value than Shuji’s previous Japanese employer. Soraa develops 2nd and 3rd Generation Solid State Lighting products.

Energy savings corresponding to 60 nuclear power stations by 2020

The global lighting revolution triggered by Shuji Nakamura’s inventions leads to energy savings corresponding to 60 nuclear power stations by 2020 – 60 nuclear power stations less will need to be built than without Shuji Nakamura’s inventions.

2nd Generation and 3rd Generation Solid State Lighting

With his venture company Soraa, Shuji is now working on 2nd Generation Solid State Lighting (GaN on GaN substrates) and 3rd Generation Solid State Lighting (laser lighting, which allows much higher light density), and which is already in use for car headlights.

Why squeeze Nobel Prize winner Shuji Nakamura into a top-down narrative?

Shuji Nakamura showed with a long list of newspaper clippings, TV show extracts, and Japanese Government agency announcements that he is being squeezed into a top-down innovation narrative, which is at odds with the findings of the Nobel Prize Committee of the Swedish Academy of Science.

Shuji Nakamura asks why he is being squeezed retrospectively into a top-down innovation narrative.

The truth is that most real innovation is bottom-up and disruptive, not government planned and top-down.

At the 8th Ludwig Boltzmann Forum we had intense discussions between Her Imperial Highness, Princess Takamado, Professor Makoto Suematsu, Nobel Prize Winner Shuji Nakamura, Professor Nomura, JST-President Michinari Hamaguchi, and several other Japanese technology and R&D leaders.

Read a summary of Shuji Nakamura’s talk here.

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Top-down vs bottom-up innovation: Japan’s R&D leaders at the 8th Ludwig Boltzmann Forum

Ludwig Boltzmann Forum

How to fast-track innovation in Japan

Shuji Nakamura’s invention of high efficiency LEDs enable us to reduce global energy consumption by an amount corresponding to 60 nuclear power stations by 2020, for which he was awarded the 2014 Nobel Prize in Physics.

Still, a poster child for bottom-up innovation, Shuji Nakamura was sued by his employer, left for the USA, and is now building a company in Silicon Valley which might soon become bigger than his former Japanese employer.

Why does Shuji Nakamura’s bottom-up innovation not fit into top-down innovation narratives?

Why does Shuji Nakamura’s bottom-up innovation not fit into top-down innovation narratives? Would Japan be a better and faster growing place with a better balance between bottom-up and top-down innovation? Does top-down innovation work at all?

Shuji Nakamura came specially from the USA to address many of Japan’s science and technology R&D leaders at the 8th Ludwig Boltzmann Forum, and explain why it makes no sense to try squeezing his bottom-up inventions into a top-down narrative and why its better to overcome established top-down narratives.

Read how Shuji Nakamura tries to help Japan’s leaders to overcome top-down-only narratives, and understand what bottom-up innovation means.

The 8th Ludwig Boltzmann Forum brought together Nobel Prize Winner Shuji Nakamura, the leaders of Japan’s two major research and technology R&D funding organizations, Professor Nomura, who is working to overcome gender inequality for Japan’s (too few) medical doctors, and several of Japan’s technology leaders to discuss how to accelerate innovation in Japan.

Her Imperial Highness, Princess Takamado honored us by taking a very active part, and asking thoughtful questions to Nobel Winner Shuji Nakamura and other speakers.

Read and join the discussions with Japan’s R&D leaders’ talks held at the 8th Ludwig Boltzmann Forum.
[in Japanese 日本語]

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Fukushima nuclear disaster: 5 years since the Tohoku earthquake and tsunami on 2011/3/11 at 14:46:24

(c) eurotechnology.com

5 years and many lessons learnt since the Tohoku and Fukushima disasters

Tohoku disaster and Fukushima nuclear disaster lead to Japan’s energy market liberalization

Tohoku disaster: On Friday March 11, 2011 at 14:46:24, the magnitude 9.0 “Great East Japan earthquake” caused a tsunami, reaching up to 40.4 meters high inland in Tohoku.

Japan’s National Police Agency registers 15,894 deaths and 2,562 missing people.

TEPCO’s Fukushima Dai-1 nuclear power plant vs Tohoku Electric Power Corporation’s Onagawa Nuclear Power Plant

One of the world’s worst nuclear disasters started at Tokyo Electric Power (TEPCO) Fukushima Dai-1 Nuclear Power Plant.

The Onagawa Nuclear Power Plant, owned and operated by Tohoku Electric Power Company, and built under Yanosuke Hirai, was closest to the 2011/3/11 earthquake’s epicenter, and survived the quake without major damage and was successfully shut down, and served as a refuge for 300 people from the neighborhood who had lost their homes. There were radiation alarm signals at Onagawa Power Station, but these alarms were caused by radioactive fallout blown from Fukushima-Dai-Ichi by winds, and did not originate from Onagawa.

The Onagawa Nuclear Power Plant was the only nuclear power plant in the region of the Tohoku Earthquake that survived the earthquake without any major damage.

On Yanosuke Hirai’s insistence, Tohoku Electric Power Company built Onagawa Nuclear Power Plant at 13.8 meters above sea level, while during the construction of TEPCO’s Fukushima Dai-1 plant the natural ground elevation was reduced from 35 meters to 10 meters. The Tsunami reached 13 meters height in both locations.

In 1990 Tohoku Electric Power Company (Onagawa Nuclear Power Station Construction Office) published a detailed analysis of the Great Jogan Tsunami of AD 869

Yanosuke Hirai had researched the Great Jogan Tsunami of July 13, 869, which was caused by the 869 Sanriku Earthquake (貞観地震). The results were taken into account in planning the Onagawa Nuclear Power Station, and published in 1990:

Hisashi Abe, Toshisada Sugeno, Akira Chigama, (Onagawa Nuclear Power Station Construction Office)
“Estimation of the Height of the Sanriku Jogan 11 Earthquake-Tsunami (AD 869) in the Sendai Plain”
Zisin (Journal of the Seismological Society of Japan, 2nd Series), Vol. 43 (1990) No. 4 P 513-525

See also the “869 Sanriku earthquake” entry in Wikipedia.

Fukushima nuclear disaster mitigation. US sends 150 nuclear experts headed by Chuck Casto to work with the Japanese Prime Minister and top leaders for 11 months to help deal with the Fukushima disaster

The USA sent a team of about 150 nuclear experts for 11 months to Japan to assist TEPCO and the Japanese Government in mastering the nuclear crisis. This team was headed by Chuck Casto – read some of his conclusions here:

Japan’s first ever Parliamentary Commission

Japan’s Parliament for the first time ever created an Independent Parliamentary Commission to analyze the nuclear disaster, headed by Kiyoshi Kurokawa, read the summary of his talk “Groupthink can kill” here (including videos describing the Commissions results in simple easy to understand terms).

Three former TEPCO executives have now been indicted by a citizen’s prosecution committee.

Nuclear disaster leads to energy market liberalization in Japan

Japan’s faith in nuclear power was shaken, leading to development of renewable energy, liberalization and long overdue reforms of Japan’s energy sector.

Quakes and after-quakes

The figures show that more than 300 earthquakes of magnitude 5 or larger occurred since the major quake on March 11, 2011 at 14:46. The epicenters of quakes lie mostly where the Pacific Plate moves under the North American Plate on which Tohoku lies.

According to our knowledge earth quakes are mathematically speaking a “chaotic” phenomenon, and scientific arguments are, that it is difficult if not impossible to predict earth quakes with precision. (Figure: Wolfram Alpha LLC)

Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)

Nuclear fallout on Tokyo: radiation levels in Tokyo/Shinjuku

Starting with Tuesday 15 March 2011, radioactive fallout came down on Tokyo as shown in the figures below.

Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria
Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria

Radiation levels in Tokyo (Shinjuku and Shibuya) and Tsukuba:

Radiation in Tsukuba (until April 13, 2011) compared to Austria
Radiation in Tsukuba (until April 13, 2011) compared to Austria

The blue curve above shows the radiation levels in Tokyo/Shinjuku as measured and published by the Tokyo Metropolitan Institute for Public Health here:

  • each hour for the last 24 hours
  • daily starting March 1

The red curves show maximum and minimum data as measured by TEPCO in Tokyo-Shibuya, and published here: TEPCO radiation data

The green curves show radiation data measured by Japan’s highly respected AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

Radiation levels in Tsukuba

The green curves show radiation data measured by AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

The radiation measurement results in Tsukuba are considerably higher than found in Tokyo, but have decreased close to the top levels found naturally in Austria and in many other countries.

The differences in the data between Tokyo and Tsukuba could be because Tsukuba is 60km closer to Fukushima, could be caused by weather conditions, but they could also be caused by differences in the measurement equipment or a combination of these factors.

Eurotechnology-Japan newsletters in March/April 2011

In a series of newsletters, our company informed our customers, and friends about the nuclear disaster impact on Tokyo. Our newsletters were reposted by our readers to 100s of friends, and in some cases influenced the decisions by foreign subsidiaries here in Tokyo. In the days following the nuclear disaster, it was difficult for non-phycists to understand the true situation, and what the radioactive fallout really meant.

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Mobile internet’s 17th birthday

The global mobile internet revolution started with Docomo’s i-Mode on February 22, 1999

The global mobile internet revolution started with Docomo’s i-Mode on February 22, 1999

i-Mode, Happy Birthday!

Today, exactly 17 years ago, on February 22, 1999, NTT-Docomo launched the world’s first mobile internet service, i-Mode, at a press conference attended only by a handful of people.

NTT-Docomo created the foundation of the global mobile internet revolution, and i-Mode is still a cash-cow for Docomo in Japan, but Docomo did not succeed to capture global value.

i-Mode pioneered many business models, which are today monetized by Apple and Google (mainly via Android).

i-Mode also contributed to make Japan the world’s biggest App market in terms of cash revenues, and helped Japanese app companies to be among the world’s largest and top grossing.

Read in detail in our blog:
i-Mode was launched Feb. 22, 1999 in Tokyo – birth of mobile internet

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SHARP and the future of Japan’s electronics

SHARP and the future of Japan’s electronics

SHARP is in the news, but its about Japan’s US$ 600 billion electronics sector

The need for focus and active portfolio management

SHARP, supplier of displays to Apple, faces repayment of about YEN 510 billion (US$ 4.2 billion) in March.

Innovation Network Corporation of Japan INCJ (産業革新機構) and Taiwan’s Honhai Precision Engineering (鴻海精密工業) “Foxconn” compete for control of SHARP.

While SHARP makes headlines, the big-picture issues are:

  1. corporate governance reforms in Japan
  2. the future of Japan’s US$ 600 billion electronics sector, which dominated world electronics in the 1980s but failed to keep up with the evolution and growth of global electronics.

To survive Japan’s old established electronics conglomerates have two choices:

  1. focus on a small number of key products (remember Apple CEO Tim Cook showing that all of Apple’s products fit on one small table)
  2. actively managed portfolio model

however, for Japan’s economy to prosper, Japan needs many more young fresh new companies in addition to the old established conglomerates.

Interviews for BBC-TV and French Les Echos

Last week I was interviewed both live on BBC-TV and also by the French paper Les Echos about SHARP’s future:

In summary, I said that its not just about SHARP’s current predicament, but its about corporate governance reform in Japan, about reinventing Japan’s electronics sector, and that its more likely at this stage that Japan’s Innovation Network Corporation (INCJ) will take control SHARP, since INCJ is not just concerned with SHARP but with the bigger picture of restructuring Japan’s electronics sector.

INCJ has concepts for combining SHARP’s display division with Japan Display, and has plans for SHARP’s electronics components divisions, and for the white goods division, and other divisions.

SHARP governance: How and why did SHARP get into this very difficult situation?

SHARP is a poster child for the urgent need for corporate governance reform in Japan.

Essentially SHARP assumed that the world market for TVs and PC displays will continue to demand larger and larger and more expensive display sizes, and thus took bank loans to build a very large liquid crystal display factory in Sakai-shi, south of Osaka.

In addition, SHARP, has a huge portfolio of many different products ranging from office copying machines and printers and scanners, mobile phones, high-tech toilets, liquid crystal displays, solar panels, and hundreds of other products. SHARP keeps adding new product ranges constantly expanding its portfolio of businesses, and rarely sells loss making divisions.

Effective and strong independent, outside Directors on the Board might have asked questions during the decision making leading to the building of the Sakai factory. They might have asked for a Plan B, in case the global display market takes a turn away from larger and larger and more expensive displays, or if the competition heats up and prices start decreasing, they might have asked about SHARP’s competitive strengths, they might have also questioned the wisdom to finance an expensive factory via short-term bank loans as opposed to issuing shares to spread the risks to investors.

Its not just outside Directors, shareholders could have also asked such questions.

SHARP has about YEN 678 billion (US$ 5.6 billion) debt, most is short-term debt, and in a few weeks, in March 2016, SHARP needs to repay about YEN 510 billion (US$ 4.2 billion), and needs to find this amount outside.

SHARP is a Japanese electronics company, founded in 1912 by Tokuji Hayakawa in Tokyo as a metal workshop making belt buckles “Tokubijo”, and today one of the major suppliers of liquid crystal displays for Apple’s iPhones, iPads and Macs.

SHARP today has about 44,000 employees, many factories across the globe, sales peaked around YEN 3000 billion (US$ 30 billion) in 2008, and show a steady downward trend since 2008.

Revenues (profits) peaked in 2008, and have fallen into the red since.

SHARP's revenues (sales) peaked in 2008, and since then stagnated around YEN 3000 billion (US$ 30 billion), and show a downward trend ever since
SHARP’s revenues (sales) peaked in 2008 around YEN 3000 billion (US$ 30 billion), and show a downward trend ever since
Averaged over the last 14 years, SHARP shows average annual net losses of around YEN 38 billion per year (US$ 380 million per year)
Averaged over the last 14 years, SHARP shows average annual net losses of around YEN 38 billion per year (US$ 380 million per year)

What future for SHARP? Focus vs portfolio company

SHARP (or rather, its creditors, the two “main banks” Mizuho and Mitsubishi-Tokyo-Bank, and others controlling the fate of today’s SHARP) needs to decide whether it focuses on a group of core products, in which case it needs to be No. 1 or No. 2 globally for these products. Successful examples are Japan’s electronic component companies.

Or on the other hand, SHARP could be a portfolio company, in which case this portfolio must be actively managed.

What future for Japan’s US$ 600 billion electronics sector?

Japan’s 8 large electronics conglomerates:

  • Hitachi
  • Toshiba
  • Fujitsu
  • NEC
  • Mitsubishi Electric
  • Panasonic
  • SONY
  • SHARP

combined have sales of about US$ 600 Billion, similar to the economic size of The Netherlands, but combined for about 15 years have shown no growth and no profits. They are poster children for the urgent need for corporate governance reform in Japan.

These 8 electronics conglomerates are portfolio companies, and they need to manage these portfolios actively, such as General Electric (GE) or the German chemical industry are doing. Germany’s large chemical and pharmaceutical industries started active and drastic product portfolio management in the 1990s, and are continuing constant and active portfolio optimization via acquisitions, spin-outs, and other M&A actions, and so is GE.

A stark contrast are Japan’s very successful, profitable and growing electronics component companies.

Innovation Network Corporation of Japan INCJ (産業革新機構)’s dilemma

INCJ aims “to promote the creation of next generation businesses through open innovation” according to its website.

Japan’s NIKKEI financial daily mentions INCJ’s dilemma, whether attempting the rescue of an old conglomerate is compatible with its mission to create next generation business through open innovation.

Why “let zombie companies die” is beside the point

Concerning SHARP some media wrote headlines along the lines of “let zombie companies die”. Thats easy to write, however, SHARP is a group with 44,000 employees, many factories, about US$ 30 billion in sales annually.

“Let this zombie die” is not an option, SHARP has 100s of products, and divisions, and the best solution for each of these divisions is different. And that is exactly what the Innovation Network Corporation of Japan seems to be considering in its plans for SHARP.

I think the way forward is not “to let zombies die”, but to develop private equity in Japan

I think the move of Atsushi Saito, one of the key drivers of Japan’s corporate governance reforms, from CEO of Tokyo Stock Exchange/ Japan Exchange Group, to Chairman of the private equity group KKR is a tremendously important one in this context.

Will there be native Japanese private equity groups with sufficient know-how and ability to take responsibility of restructuring Japan’s electronics sector? Thats maybe the key question.

Why its not really about nationalism

Some media bring a nationalist angle into SHARP’s issues. However, Nissan was rescued by French Renault, UK’s Vodafone acquired Japan Telecom, and there are many other examples, where foreign companies acquire Japanese technology companies.

I don’t think nationalism is an issue here. The key issues is to create and implement valid business models for Japan’s huge existing electronics sector, and more importantly, create a basis for the growth valid new companies – not just reviving old ones.

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Economic growth for Japan? A New Year 2016 preview

Economic growth for Japan in 2016?

Economic growth for Japan in 2016?

Economic growth: Almost everyone agrees that economic growth is preferred over stagnation and decline. Fiscal policy and printing money unfortunately can’t deliver growth.

  1. Building fresh new successful companies,
  2. returning stagnating or failed established companies back to growth (see: “Speed is like fresh food” by JVC-Kenwood Chairman Kawahara), and
  3. adjusting the structure and business models of existing companies to the rapidly changing and globalizing world (see: “Japanese management – why is it not global?” by Masamoto Yashiro)

deliver growth.

Governments best help economic growth by reducing friction, and by getting out of the way of entrepreneurs building, turning-round, and refocusing companies.

Some required action is counter to intuition: for example, in many cases reducing tax rates increases Government’s tax income, a fact known for many years. Effective education and research are key to create, understand and apply such non-obvious knowledge.

Companies need efficient leadership, leadership needs feedback, wise and diverse oversight by Boards of Directors, who ring alarm bells long before a company hits the rocks, or fades into irrelevance. Corporate governance reform may be the most important component of “Abenomics”. Read a Board Director’s view on Japan’s corporate governance reforms:

Japan’s electrical conglomerates are some of the poster children motivating Japan’s corporate governance reforms. In an interview about Toshiba’s future on BBC-TV a few days ago, I explained that Japan’s electrical conglomerates showed no growth and no profits for about 20 years, and the refocusing Toshiba has announced now should have been done much much earlier, 10-20 years ago (“Speed is like fresh food“). Refocusing Japan’s established corporate giants will release resources for start-ups, spin-outs and growth companies.

Japan can be very good at restructuring and turn-rounds, e.g. see

Happy New Year!

Gerhard Fasol

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Copyright·©2016 ·Eurotechnology Japan KK·All Rights Reserved·

Was Osamu Suzuki first to understand Volkswagen’s Diesel issues?

VW Volkswagen Suzuki

Osamu Suzuki: “we looked at Wagen’s technologies, and could not find anything we need” (Nikkei, 1 July 2011)

Did Volkswagen underestimate Mr Suzuki?

Over the last 18 years myself and our company have worked on many foreign-Japanese company partnerships, therefore we always have great interest in business partnerships involving Japanese companies, and have followed the Volkswagen-Suzuki relationship closely.

We published two blog articles after the ICC Arbitration Court issues judgement sealing the Suzuki-Volkswagen divorce, and before we became aware of the Volkswagen Diesel issues:

When I was asked to brief German President Horst Köhler on April 3, 2005 about Japan’s technology sector, my advice included the following:

Interaction with Japan enforced total restructuring of leading US companies, including INTEL and MOTOROLA. According to my knowledge, there are almost no European companies yet which were forced to totally restructure their business due to interaction with Japan. I feel that this may happen in the future.

Volkswagen could be a candidate now, although US agencies and courts are now primary actors, Suzuki’s role may not be negligible.

Volkswagen had already lost out against Suzuki, and Suzuki’s CEO Mr Osamu Suzuki in the 1980s when India started to build an Indian automotive industry. India had considered to build India’s car industry based on Volkswagen’s Beatle, but decided to go with Mr Osamu Suzuki instead. Maruti Suzuki India Limited (マルチ・スズキ・インディア) achieved 45% market share in India’s passenger car market in 2014. Suzuki Motors owns 54% of Maruti Suzuki, and Mr Osamu Suzuki is greatly respected as Japan’s No. 1 top India expert.

When Mr Osamu Suzuki entered into the Maruti Suzuki India Joint-Venture, he reportedly insisted to have 100% decision making and management rights in the Joint-Venture.

Links between the Suzuki-Volkswagen and the Volkswagen Diesel issues time lines.

We can see interesting links in the time lines of the Suzuki-Volkswagen relationship and the Volkswagen Diesel issues:

Time line of events relevant to the Suzuki Volkswagen relationship

  • 16 Nov 1970: “Maruti technical services private limited” (MTSPL) to create an Indian automobile industry, first CEO: Sanjay Gandhi. Sanjay Gandhi contacted Volkswagen AG to seek a cooperation to produce an Indian version of the VW Käfer (Beatle). However, a cooperation with Volkswagen did not work out. The company failed in 1977, and was reborn as Maruti Udyog Ltd by Dr V. Krishnamurthy.
  • 1982: Maruti Udyog Ltd and Suzuki entered into a licensing and joint venture agreement, creating Maruti Suzuki India Limited (マルチ・スズキ・インディア), which in 2014 achieved a 45% market share of India’s passenger car market.
  • 20 0ctober 2005: Suzuki and FIAT announce a partnership on FIAT’s Diesel engines (see: Suzuki announcement)
  • 6 March 2006: Suzuki and GM announce the reduction of GM’s stake in Suzuki from 20% to 3%, strongly reducing the GM holding in Suzuki, which had started in August 1981. (see: Suzuki announcement)
  • 9 Dec 2009: VW-CEO Martin Winterkorn and Suzuki-CEO Osamu Suzuki announced the “comprehensive partnership” at a press conference in Tokyo (see: joint Suzuki Volkswagen press announcement)
  • 9 Dec 2009: Suzuki transferred 107,950,000 treasury shares to Volkswagen AG, valued approx at 226,695,000,000 yen (= approx. US$ 2.3 billion)
  • 15 Jan 2010: VW purchased 19.89% of Suzuki shares for about € 1.7 billion
  • March 2011: Volkswagen writes in the annual report that Volkswagen “significantly influence financial and operating policy decisions” at Suzuki
  • 1 July 2011: Osamu Suzuki publicly airs his frustrations with “Wagen-san’s” intentions in his Japanese language blog in Japan’s Nikkei “スズキとワーゲンの今とこれから (鈴木修氏の経営者ブログ)” (“Suzuki and Wagen now and the way forward”) (may need Nikkei subscription)
  • Sept 2011: Suzuki’s Board decides to terminate the partnership
  • 18 Nov 2011: Suzuki gives notice to Volkswagen of termination of partnership, Volkswagen does not reply (says Suzuki)
  • 24 Nov 2011: Suzuki files for arbitration at International Court of Arbitration of the International Chamber of Commerce (ICC) in London
  • 2013-2014: The International Council on Clean Transportation (ICCT) conducts a research project in collaboration with the West Virginia University to determine real world, away from test rigs, emissions from diesel cars in the USA. Project leader is John German. ICCT tests a VW Jetta, a VW Passat, and a BMW X5, and finds that in real world driving conditions, the VW Jetta exceeds the US-EPA Tier2-Bin5 Nix (Nitrogen Oxide) emission standards by 15 to 35 times, the VW Passat by 5 to 20 times, while the BMW X5 generally conformed to the standards except in extreme conditions. The fact that the BMW X5 conforms to the standard for the ICCT was proof that the technology to conform existed. (see: ICCT announcement)
  • 30 Aug 2015: ICC Arbitration Court issues judgement and holds the termination of the partnership valid, orders VW to sell all Suzuki shares back to Suzuki (or a 3rd party selected by Suzuki), and orders Suzuki to pay damages for breaking the agreement
  • 17 Sep 2015 8:45am: Suzuki purchases back 119,787,000 of its own shares previously owned by VW via Tokyo Stock Exchange ToSTNeT-3 system for 460,281,547,500 yen (approx. US$ 3.9 billion), completing the termination of the partnership and capital alliance with VW
  • 18 September 2015: Press announcement by The ICCT “EPA’s notice of violation of the Clean Air Act to Volkswagen
  • 18 September 2015: EPA notice of violation to Volkswagen (See: EPA announcement), EPA website concerning Volkswagen
  • 18 September 2015: California Air Resources Board (CARB) letter to Volkswagen, “Re: Admission of Defeat Device and California Air Resources Board’s Request”
  • 26 Sep 2015: Suzuki announced the transaction to sell all 4,397,000 Volkswagen shares which Suzuki owns to Porsche Automobile Holding SE, completing the termination of the partnership and capital alliance with VW

The International Council on Clean Transportation (ICCT) study on real-world exhaust emissions from modern diesel cars

The ICCT noted that there is a wide discrepancy in emissions by cars under test conditions and in real live road driving conditions, and conducted the project on real-world exhaust emissions from modern diesel cars.

The report can be dowloaded here as a pdf file: “REAL-WORLD EXHAUST EMISSIONS FROM MODERN DIESEL CARS

“In-Use Emissions Testing of Light-Duty Diesel Vehicles in the United States”

The ICCT contracted with the Center for Alternative Fuels, Engines and Emissions (CAFEE) at West Virginia University to test the real road emissions of three cars in the USA. This study is explained on the ICCT website “In-use emissions testing of light-duty diesel vehicles in the U.S.”

The final report can be downloaded here: “Final Report: In-Use Emissions Testing of Light-Duty Diesel Vehicles in the United States. by Dr. Gregory J. Thompson (Principal Investigator)“.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Burberry Japan: breaking up is hard to do

Burberry Omotesando Tokyo (c) eurotechnology.com

Burberry Japan pivots from successful partnership to direct business

by Gerhard Fasol, All Rights Reserved.



Burberry's new directly operated flagship store in Tokyo Omotesando
Burberry’s new directly operated flagship store in Tokyo Omotesando

Sanyo Shokai pivots from Burberry to Mackintosh and other brands

Burberry Japan pivots to direct business to solve Burberry’s “Japan Problem”: for the last approx. 50 years Burberry’s business in Japan was not Burberry’s business at all, but run under license by the Japanese company Sanyo Shokai and the giant trading company Mitsui. Sanyo Shokai’s core business was developing its own product lines Blue Label and Black Label and selling them under the Burberry Blue Label and Burberry Black Label brands.

Almost every day a foreign company approaches us to help them find a “Japanese partner” to build their business in Japan…

There are many examples of very successful Japan-market-entries via partnerships. Success stories include: Oracle, Salesforce.com, Starbucks, Fuji-Xerox, Yahoo, SuperCell, and many more, and until a few months ago, Burberry.

Read our analysis here, and background facts here.

Burberry found an excellent Japanese partner in 1965, Sanyo Shokai, backed by giant trading company Mitsui, and Sanyo Shokai built a terrific business for Burberry in Japan! Not only did Sanyo Shokai import Burberry products to Japan, but Sanyo Shokai also developed two enormously successful sub-brands for Burberry in Japan: Burberry Blue Label and Burberry Black Label. And Sanyo Shokai kept transferring substantial royalties/license fees to Burberry’s headquarters.

Actually it turned out that almost all the business value for Burberry in Japan was in the Burberry Blue Label and Burberry Black Label sub-brands, which were developed by Sanyo Shokai in Japan, by Japan and for Japan – and with the required Japanese quality and customer service. Sanyo Shokai also contributed the Japanese Burberry flagship store in one of the world’s prime luxury shopping areas, Ginza, and about 300-500 Burberry stores all over Japan – many in prime locations.

In June 2015, Burberry terminated this very successful licensing relationship.

Now after their divorce, both Burberry and Sanyo Shokai rebuild their businesses in Japan from scratch:

  • Burberry lost 300-500 stores which belong to Sanyo Shokai, and Sanyo Shokai’s flagship store in Ginza, and essentially has to build a Burberry business in Japan from zero, while former partner Sanyo Shokai is busy moving former Burberry customers over to Mackintosh and other Sanyo Shokai brands, with Mackintosh in almost the same segment Burberry is now entering afresh
  • Sanyo Shokai licensed the Mackintosh brand from Osaka based Yagi Tsusho, and is now pivoting 300-500 stores in Japan from the Burberry brand to the Mackintosh brand, and other Sanyo brands
Sanyo Shokai's flagship building  in Tokyo-Ginzs, one of the world's prime luxury shopping areas, much frequented by cash-rich Chinese shoppers. Currently being converted from the Burberry brand to Mackintosh and other Sanyo Shokai brands (second building from the left)
Sanyo Shokai’s flagship building in Tokyo-Ginzs, one of the world’s prime luxury shopping areas, much frequented by cash-rich Chinese shoppers. Currently being converted from the Burberry brand to Mackintosh and other Sanyo Shokai brands (second building from the left)

Some puzzles about this split

  • why has Burberry not decided on a less disruptive transition? For example, acquiring Sanyo Shokai comes to my mind. Acquisitions in Japan are not unheard of, and since Sanyo Shokai is a publicly traded company, well established rules apply.
  • why did Sanyo Shokai over the 50 years since starting the relationship with Burberry not build its 100% owned brand? Much smaller Yagi Tsusho managed to acquire Mackintosh, why did not Sanyo Shokai within the last 50 years acquire or develop a 100% owned and successful brand? With Blue Label and Black Label, Sanyo Shokai has proven its ability to build and develop brands, why not under their own brand?

There are a number of other puzzles here. Has this transition been well thought through?

It will be interesting to see where both Burberry and Sangyo Shokai will stand 10 years from now – 10 years from this divorce. Both certainly are in challenging situations in Japan now after this divorce. Will both survive in Japan? Or only one of the two?

Read more details here.

Foreign companies seeking to build a business in Japan via a partnership, and Japanese companies seeking to build the business of foreign companies in Japan can certainly learn from this case study. Although its fashion and apparel, many of the underlying issues also apply in all other business areas, such as electronics, and technology.

Copyright·©2009-2015 ·Eurotechnology Japan KK·All Rights Reserved·

Nintendo smartphone pivot?!

Nintendo partners with DeNA

Taking Nintendo intellectual property and characters to smartphones

Nintendo was founded on September 23, 1889 by Fujasiro Yamauchi in Kyoto for the production of handmade “hanafuda” cards. Nintendo Headquarters are still located in Kyoto (you can see the Nintendo headquarters building from the Kyoto railway station).

The Chinese characters used to write Nintendo’s original Japanese company name in Japanese mean something like “leave the responsibility to heaven or to god”.

Nintendo has been through many pivots during its more than 100 years history, and Nintendo can afford to take its time to do things right, and it did when smartphones started disrupting industry sector after industry sector, and did not stop disrupting the games industry.

Nintendo has a home advantage – the epicenter of the global games industry is in Japan, and not surprisingly, Japan is by far the world’s No. 1 biggest smartphone games market by cash income (other markets are bigger in terms of free downloads, but Japan is No. 1 globally in terms of cash revenues). So Japanese game companies have a big home advantage.

The No. 1 company ranked by gross revenues of the combined total iPhone + Android app market is also a Japanese company.

Yesterday, March 18, 2015, Nintendo announced to join forces with DeNA to jointly develop smartphone games including subscription based game services as a platform to leverage Nintendo’s iconic intellectual properties and characters.

Do you understand the big picture of Japan’s games industries, which drive the global game market? Make sure you do – and read our report:

“Japan’s game makers and markets (27th edition)”

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

i-Mode was launched February 22, 1999 in Tokyo – birth of mobile internet

i-mode menu NTT docomo

The mobile internet was born 16 years ago in Japan

Galapagos-Syndrome: NTT Docomo failed to capture global value

On February 22, 1999, the mobile internet was born when Mari Matsunaga, Takeshi Natsuno and Keiichi Enoki launched Docomo’s i-Mode to a handful of people who had made the effort to the Press Conference introducing Docomo’s new i-Mode service. KDDI soon followed with EZweb, and J-Phone with Jsky (J-Phone was acquired by Vodafone, which was unable to manage J-Phone, Vodafone then sold the company to SoftBank).

i-Mode’s popularity soon exceeded any expectation: Docomo for some periods had to limit new subscriptions.

With Steve Jobs’ love for Japan, and Apple’s intense supplier relationships with Japan, its not farfetched to see connections between i-Mode and iPhone, in particular the i-Mode ecosystem and Java-based i-Appli’s are forerunners of today’s apps and apps-ecosystems.

At that time there was no Wikipedia, and Docomo had no English-language website at all, so our company Eurotechnology Japan KK’s information was more or less the only English language information openly available about i-Mode. We were bombarded by requests from many major semiconductor firms, telecom operators, investment banks, students and world-famous business schools for our i-Mode report and related business development and strategic work.

Learn about Japan’s telecom markets: read the 65th edition of our report.

Today 5 of the global top-10 top-grossing Apps are Japanese

While Docomo never managed to capture global value from inventing and first introducing the mobile internet, the No. 1 top-grossing company globally, and five of the top-10 globally top-grossing Apps for iOS and Google-Play combined are Japanese (source: App-Annie).

Japan’s app market is the world’s largest in terms of cash revenues

Its also no coincidence that in terms of cash value, Japan’s is the world’s largest app-market for iOS and Google-Play combined, bigger than the US market and the Chinese market in terms of cash value. (source: App-Annie).

App-Annie’s data to our knowledge only cover the iOS and Google-Play app-stores, not the i-Mode and other mobile internet businesses, so Japan’s actual mobile app economy is even larger than App-Annie data show.

Which are the top-grossing apps in Japan?

i-Mode is still alive and kicking – and a big business for Docomo

i-Mode is still today the mobile internet system for Docomo’s traditional flip-phones which are still an important part of the market, and recently made headlines since sales for traditional flip-phones were rising, while smartphone sales were (temporarly?) dropping.

i-Mode (and EZweb for KDDI, and Yahoo-mobile for SoftBank) will still be important business for some time to come in Japan.

Copyright (c) 2015 ·Eurotechnology Japan KK All Rights Reserved

Shuji Nakamura: did he invent the blue GaN LED alone and other questions. An Interview.

Shuji Nakamura at the Ludwig Boltzmann Forum

Interview for the Chinese Newspaper Southern Weekly about Shuji Nakamura

The Chinese Newspaper Southern Weekly interviewed me about Shuji Nakamura’s invention of the blue LED and the background to his Nobel Prize. Here some of my answers.

Read the article in Southern Weekly in Chinese language here: 【2014诺贝尔·科学】无人相信的发明

Shuji Nakamura: when he first announced his breakthrough, most people just did not believe him initially. But you are an exception. What made you believe in Dr Nakamura?

At the time when I first heard Shuji Nakamura’s results around 1992 – long before Bob Johnstone hear about these results (Bob Johnston is a friend of mine, and I know him for a long time – but Bob Johnstone is a journalist, I am a Physicist) I had worked about 18 years in physics research, at many of the best research labs in the world. So I had at that time already a very long experience in research. When I heard Shuji Nakamura’s talk at the Physics Conference in Nagoya, I could immediately judge from his talk that this was a very very important result. So I visited Shuji Nakamura at his laboratory at the company Nichia in Anan several times for discussions, he gave me copies of his papers and patents and I studied his research papers and his patents, and he also showed me the blue LEDs so I could see for myself. I had worked a long time in this field already, so I could understand that his work was true, and I could also see the working blue LEDs with my own eyes. Such blue LEDs did not exist before, so it was clear that he had succeeded in this breakthrough.

At that time I knew almost all research groups in the world working on blue LEDs, at IBM, Hitachi, SONY, and many University labs and national labs globally, and I knew the status of their research. It was obvious that Shuji Nakamura had won this race.

It is true that many people did not believe his results initially. That was because these people did not make the same effort that I made to visit Shuji Nakamura and study his results.

For example, I send a report about Shuji Nakamura’s breakthrough to the German Physical Society member’s journal for publication, and the Editor rejected my article initially, because he showed this report to German Professors in this field. They had not heard about Shuji Nakamura’s work, so they had never heard about this blue LED breakthrough and were working in their own labs on II-VI compounds which was a dead end. Because they considered themselves as the top experts in the field they rejected my report on Shuji Nakamura’s work.

I told the Editor that I am right, and the German experts are wrong, the Editor believed me and printed my report about Shuji Nakamura’s work. You can read this report online here (in German language):
http://onlinelibrary.wiley.com/doi/10.1002/phbl.19950511004/abstract

Some researchers question whether Dr Nakamura made the blue LED on his own. Why do people criticise his achievement and what is the truth? Do these rumors continue after the Nobel Prize was announced?

Every researcher “stands on the shoulder of giants”, of course now work is done in total isolation, and always rests on some previous results. Even Einstein, who did not read many scientific papers and worked out many results on his own from zero point, of course used many results of others.

Therefore Shuji Nakamura’s work of course relied on the hard work of many other researchers before him. For example he used the production technology called MOCVD (Metal Organic Chemical Vapor Deposition), which he learned in Professor Ramaswamy’s group at the University of Florida (Professor Ramaswamy was working in the office next to mine at Tokyo University for about 1 year, so I know him also very well). Shuji Nakamura also could read the published part of Professor Akasaki and Professor Amano’s excellent results on GaN compounds – Professor Akasaki and Amano’s work were also awarded the Nobel Prize at the same time as Shuji Nakamura.

Shuji Nakamura could not have done his work without the support of the Founder and Chairman at that time of the company Nichia, Mr. Nobuo Ogawa. Shuji Nakamura introduced me to his Chairman Mr Nobuo Ogawa and I had lunch with him several times and discussed how he supported Shuji Nakamura’s work financially and as the leader of Nichia. Mr Nobuo Ogawa at that time owned about 1/3 of the company Nichia, so he could take major decisions such as supporting Shuji Nakamura.

I believe that at Nichia there are two people without whom this work would not have happened:

  1. Chairman Nobuo Ogawa and
  2. Shuji Nakamura

Neither could have done the work alone, and both together were necessary to achieve this
breakthrough at Nichia. Also, when Shuji Nakamura went to Mr Nobuo Ogawa and proposed to work towards the discovery of blue GaN LEDs, at that time, Shuji Nakamura did not have a PhD, and no great research success stories behind him, although he has done successful development of red LEDs, but which were not commercially successful. Without a PhD I think there would have been almost no one except Mr Nobuo Ogawa who would have supported Shuji Nakamura’s proposal, certainly no large corporation, government supported research agency, or University, and without a PhD he would have had zero chance to win a peer-reviewed research grant from large research agencies.

Unfortunately Mr Nobuo Ogawa passed away some years ago, so he cannot enjoy the Nobel Prize celebrations.

Of course at Nichia, Shuji Nakamura could attract a number of very excellent assistant researchers, but it is very clear that Shuji Nakamura was the leader of the Blue LED research at Nichia who was leading a group of assistant researchers who essentially followed his leadership and were doing this work because of him and under Shuji Nakamura’s leadership. I am very convinced that if Shuji Nakamura would not have been working at Nichia, this invention would not have happened at Nichia. This is quite obvious to anyone who understands how science works.

Of course there are some people who envy Shuji Nakamura. Excellent people celebrate Shuji Nakamura’s success and get inspired. Mediocre people spend their time spreading rumors and talking bad about Shuji Nakamura, don’t listen to them. I have heard some of these rumors, and I have checked most of them direct with Shuji Nakamura, and I am convinced that these rumors are wrong.

Maybe some of the people who spread stupid rumors about Shuji Nakamura have failed in their own work, and don’t like someone else succeed?

About the Nobel Prize: The Nobel Prize in Physics is decided by the Nobel Prize in Physics Committee of the Swedish National Academy of Science. When I have worked in Europe, I met some of the members of this committee and I can tell you that they are all very very excellent Physicist. I am convinced that they are doing a very excellent job in checking in great detail how Shuji Nakamura achieved his results, and I am sure they have checked out all these rumors and found that they are untrue.

As a colleague of Dr Nakamura’s, could you describe a little bit about his style in research?

First of all like all excellent researchers Shuji Nakamura is extremely passionate, driven by passion for his work, and he is a maniac, working very very hard. When I was working on the book with Shuji, he was working with me on 30., 31., December, 1st of January all over the New Year period without break, exchanging emails with me in the middle of the night etc.

Secondly he is driven by intuition – he is a genius. Maybe you know that when Shuji studied at the University of Tokushima, the University did not have a Physics Department, so Shuji did not study full Physics but won the Physics Nobel Prize! I am Physicist, I have full Physics University training even to a PhD level, and I can tell you that Shuji has a very deep understanding of Physics, but he has essentially learnt this all by himself! Not through a University Physics degree!

I think his work is very intuitive. He has a very deep understanding of Nature, and follows his intuitions, his feelings, much more than anything he has learnt from the books.

More information:

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

Shuji Nakamura, Isamu Akasaki, Hiroshi Amano win Nobel Prize in Physics 2014 for the blue LED

Shuji Nakamura at the Ludwig Boltzmann Forum

Nobel Prize in Physics 2014 for the blue GaN LED

Shuji Nakamura, Isamu Akasaki, Hiroshi Amano enabled the global lighting revolution

The Nobel Prize in Physics 2014 was awarded in equal shares to Isamu Akasaki, Hiroshi Amano and Shuji Nakamura “for the invention of efficient blue light-emitting diodes which has enabled bright and energy-saving white light sources”.

While red and green LEDs were invented long ago, efficient blue LEDs did not exist until Akasaki’s, Amano’s and Nakamura’s long series of inventions. Blue LEDs are needed to create white light.

The invention of blue GaN based LEDs enables the global lighting revolution. By replacing legacy light bulbs, fluorescent tubes etc by GaN LEDs, a big fraction of the world’s electricity can be saved, and the effect is even bigger in the developing world where still today many people use extremely expensive oil for lighting. Read a detailed analysis of the economics of lighting here.

The mainstream blue-LED scientific community was working on a dead-end: II-VI compounds

Of course the importance of blue LEDs was understood for a long time, and in the 1980s and 1990s all major industrial and University labs were working towards this holy grail – Hitachi, SONY, Philips, IBM, lots of Universities in Europe and US and elsewhere had groups working towards blue LEDs – but they all worked on II-VI compounds, which turned out to be a dead end.

The way much (not all – and thats the way towards Nobel Prize class discoveries) of mainstream established incremental research works, in most established labs, to get peer reviewed grants for research towards blue LEDs in the 1980s, this had to be II-VI work.

It needed strong willed people as Shuji, Akasaki and Amano to take a totally different approach outside the mainstream. Its to the credit of JST and other Japanese funding agencies to have supported Amano and Akasaki’s work. Shuji on the other hand ‘only’ had one person to convince: the owner and founder of Nichia Mr Nobuo Ogawa- and did I say that Shuji did not have a PhD at that time?

Which research agency would give a couple of million $ to a researcher without a PhD but with a big almost unreachable target who still has to learn the methods (MOCVD in this case) to work towards this target – other than Mr Nobuo Ogawa?

Shuji Nakamura actually introduced me to Mr Nobuo Ogawa in Anan (Tokushima-ken), and we had several curry lunches in a restaurant next to Nichia Chemical Industries Headquarters. I asked Nichia-Chairman and Founder Nobuo Ogawa how he decided at the time to fund Shuji Nakamura’s one-year stay at the University of Florida in Professor Ramaswamy’s group to learn MOCVD (by the way Professor Ramaswamy was my office-neighbour when I was Associate Professor on the NTT Telecommunications Chair at Tokyo University), and fund Shuji Nakamura’s work to the tune of many US$ million, which at that time was a large fraction of Nichia’s overall sales.

To my question how Mr Nobuo Ogawa took the decision to support Shuji Nakamura, Mr Nobuo Ogawa simply answered: “How did you chose your wife, Gerhard?”.

Shuji Nakamura, Isamu Akasaki, Hiroshi Amano worked on III-V compounds and achieved the lighting breakthrough

While the mainstream scientific blue-LED community worked with high intensity towards this dead end without knowing that they devoted their lives and their students to a dead-end, Akasaki and Amano over many years painstakingly solved one problem after another to create electronic devices based on the III-V compound semiconductor GaN and its variations.

Shuji Nakamura then built on Akasaki and Amano’s work, solved the three major and many many minor problems remaining to create commercially viable blue LEDs. But the work did not stop there: Shuji Nakamura also created white LEDs, UV LEDs, blue Lasers (e.g. for SONY’s blue-ray DVD players and displays) and a lot more. (read about Shuji Nakamura’s breakthrough work in great technical detail here: The Blue Laser Diode)

Shuji Nakamura, Nichia Kagaku Kougiyou and releasing Japan’s creative power

Shuji Nakamura was also a very diligent writer of patents and wrote a large number of very strong patents. These inventions together with patents propelled his then employer Nichia Kagaku Kougiou from a maker of phosphors (which were used for cathode ray tubes and fluorescent tubes) to one of the most important semiconductor companies. For these inventions, Nichia paid Shuji Nakamura a salary approximately on the level of a Japanese primary school teacher, plus a few US$ 100 bonus for the inventions.

Lets not go into the law suits between Nichia and Shuji Nakamura here, but let me say, that I have never found the complete story explained in the media. Most media reports give a very incomplete picture of the true story of the law suits between Nichia and Shuji Nakamura. – I guess most media just copy from each other in this case…

I noticed Shuji Nakamura’s work first around 1992 at the Japanese Applied Physics Conference in Nagoya, where Shuji gave a talk about his GaN work. I visited Shuji a couple of times in Anan (Tokushima-ken), he introduced me to the founder of Nichia, Mr Nobuo Ogawa, without who’s support Shuji’s work would have been impossible. With Nobuo Ogawa’s death, Shuji decided to move to the USA, to Santa Barbara, where he is working today. Interestingly, when Shuji was looking for a job, he had lots of offers from USA, but none from Europe and none from Japan… Why that?

Shuji developed deep insights about issues holding back Japan, and has shared his advice on many occasions, including also the Ludwig Boltzmann Forum, which I annually organize in Tokyo as a leadership platform. Read about his talk here, where Shuji passionately calls for changes – even a revolution – in Japan, to unshackle Japan’s creative energies.

To learn more about the Blue GaN LEDs and lasers, and their invention:

and of course you can also read Shuji Nakamura’s, Isamu Akasaki’s and Hiroshi Amano’s 100s or even 1000s of original scientific publications.

Shuji Nakamura talking passionately at the Ludwig Boltzmann Forum in Tokyo 2013
Shuji Nakamura talking passionately at the Ludwig Boltzmann Forum in Tokyo 2013

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Apple Pay vs Japan’s Osaifu-keitai – the precursor to Apple Pay

Mobile Payment Forum and Eurotechnology Japan KK jointly organize the Mobile Payment Forum meeting in Tokyo

What can we learn from 10+ years of mobile payments in Japan?

Apple Pay vs Japan’s Osaifu-Keitai: watch the interview on CNBC

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file):
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Japan’s Osaifu keitai mobile payments started on July 10, 2004, after public testing during December 2003 – June 2004

Two different types of Docomo‘s “Osaifu-Keitai“, manufactured by Panasonic and by SONY, were publicly tested by 5000 customers between December 2003 – June 2004. Docomo’s Oseifu keitai mobile payment system builds on SUICA NFC stored fare cards, which JR-East brought to market in Tokyo on November 18, 2001, after long years of development and public testing, where the author of this newsletter was one of the testers.

Apple-Pay was developed building on almost 15 years of NFC payments in high volumes in Japan

Therefore, those who wish to make predictions about how the Apple-Pay market is likely to develop can use the experience gained during 15 years in Japan.

There are also some open questions, which will probably be answered after we can all check out Apple-Pay after September 19, 2014. One point which is very important is the speed of transactions – especially in transport applications such as the London or Tokyo Subways – read about this in the next section of this newsletter below.

Read more below, and in our reports on mobile payments and electronic money in Japan:

The speed of NFC mobile payments – and why does it take 10 years to reinvent the wheel?
and: what is the speed of Apple-Pay transactions?
faster than 100 milliSeconds? or 500+ milliSeconds?

On July 17, 2012 The Wallstreet Journal reported, that as far as Transport for London is concerned, there is no viable mobile payment solution available at this time, because to the knowledge of Transport for London at that time, mobile payment transactions take longer than 500 milli-seconds, which is too slow for Transport for London requirements (e.g at Picadilly station during the rush hour).

Interestingly, in Japan “mobile SUICA” payments have been used in Tokyo successfully since January 28, 2006 at the world’s busiest railway stations including Shinjuku and Shibuya – arguably more busy than Piccadilly Circus in rush hour, with transaction speeds faster than 100 milli-seconds – according to The Wallstreet Journal, London Transport did not even know about this.

Read in more detail about this issue in our blog here: “Mobile payments: 10 years to reinvent the wheel?

Therefore one obvious question we have about Apple-Pay is whether the speed of Apple-Pay transactions is in the 500+ milli-second range – unacceptable for Transport for London, or faster than 100 milli-seconds – as is Tokyo’s state of the art since January 28, 2006…
I guess we will soon learn the answer to this question.

Why is it that Japan does not capture the global value which Apple and Apple-Developers will create and capture now?

Japan developed mobile payments, e-cash, credit cards in mobile phones and at least as much functionality as Apple-Pay and an open API and a mobile payment and e-cash developer ecosystem over the last 10-15 years.

Why does Japan leave all the global value on the table for Apple and Apple developers?

Actually, I personally had discussions over the last 15 years will all major players in Japan’s mobile payment and e-cash field, crowned by 1-1 discussions with Docomo’s CEO at that time – Dr. Tachikawa – I wrote about one of these meetings in The Wallstreet Journal, of course without mentioning the details: “Wallstreet Journal leadership question of the week – Japanese leadership“.

Essentially my conclusion at that time, and today is, that Japanese companies never showed any interest at all in developing global business to capture the global value of mobile payments, e-cash and the related businesses. Japanese companies did not even try, and were not even interested in discussing the globalization of mobile payment and e-cash technologies and business models.

You can read about Japan’s Galapagos issues here:

All opportunities are not lost of course for Japanese companies in the mobile payments and e-cash fields, but most if not all of Japan’s early-mover advantage has evaporated with Apple-Pay.

In business, sometimes the second or third mover can be commercially more successful than the first mover, and it will be very very hard even for a united Japan Inc to stand up to Apple.

Apple Pay vs Japan’s Osaifu-Keitai: watch the interview on CNBC

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file):
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LINE revenues: LINE announces YEN 14.6 billion first quarter revenues

LINE revenues for quarters since 2013

LINE revenues:

LINE announced quarterly revenues on their website, the revenue data are redrawn below, with approximate US$ amounts shown as well.

Extrapolating assuming continued linear growth, we can estimate expected annual LINE revenues of YEN 70 billion (US$ 700 million) for the full year 2014.

LINE quarterly revenues
LINE quarterly revenues

Yesterday I was interviewed by Wall Street Journal about future prospects for SONY, and we discussed SONY‘s need for new “killer” products. Considering Facebook’s acquisition of WhatsUp, we thought SONY would need a “killer application” such as LINE. However, since SONY‘s current market cap with US$ 18 billion is of similar size as WhatsUp’s acquisition value, and presumably LINE’s value will be in a similar range. Thus purely theoretically, considering the growth rates of both companies, it would be more appropriate for LINE to acquire SONY than the other way round. Purely theoretically of course.

Read our report on Japan’s games sector

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Flappy bird Angry Birds ultimate Japan game disruption: flappy bird flaps to the top

Japan mobile game industries

Flappy bird Angry Birds ultimate disruption: flappy bird effortlessly flaps to to the top of ranks, while Angry Birds are watching angrily from the sidelines

Disruption of Japan’s games sector: in a previous blog post we showed that just three newcomers (Gree + DeNA + Gungho) produce more profits than the top 9 traditional game companies combined.

Lets look at some more disruption from the perspective of Japan’s iPhone App store. Lets look at Flappy Bird vs Angry Birds…

Flappy bird Angry Birds ultimate disruption: iOS Japan AppStore “free” games ranking

February 3, 2014, in the “free” ranking in the games section of the iPhone AppStore, we find LINE dominating.

And newcomer Flappy Bird has overtaken Angry Birds by a long margin. Angry Birds Go! appears on rank No. 97 – which actually in Japan is not that bad, given the huge revenues in Japan – as App Annie has shown, Japan’s the world’s biggest grossing apps market both for iOS and Android – so No. 97 in the world’s biggest App market is not that bad.

In a subsequent article we analyze the top grossing 25 apps in the iOS AppStore.

  • No. 1 LINE: Disney tsumutsumu
  • No. 6: LINE SONIC DASH S
  • No. 9: LINE Go!GO!GO!
  • No. 10: LINE PARTY Run
  • No. 17: Puzzle & Dragon by GungHo
  • No. 18: Flappy Bird
  • No. 23: LINE Pokopang
  • No. 30: LINE Dozer
  • No. 97: Angry Birds Go!

iPhone AppStore “Top Grossing” games ranking

February 3, 2014:

  • No. 1 Puzzle & Dragons by GungHo
  • No. 2 Quiz RPG Witch and black cat quiz (by Colopl)
  • No. 3 Dragon Quest Monsters Superlight (by Square Enix)
  • No. 4 Monster strike (by Mixi)
  • No. 5 LINE Pokopang (by Naver Japan)
  • No. 6 Pro yakiyu PRIDE (by Colopl Inc)
  • No. 7 Tsuri Suta (by GREE)
  • No. 8 Sengoku Enbu (by Sumzap Inc)
  • No. 9 Puyo puyo!! Quest (by Sega Corporation)
  • No. 10 Gunzei RPG aoi no sangokushi (by Colopl)

See our following blog for an analysis of the ranking of “top grossing” games in the Japan iOS AppStore.

Learn more about Japan’s games industries

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Japan game market disruption: GungHo + DeNA + GREE overtake Japan’s game icons

Combined operating income of Japan's major game companies

Japan game market disruption: new smartphone game companies overtake Japan’s game icons like Nintendo in income

[日本語版はこちらへ]

Since last financial year (ended March 31, 2013), three newcomers (GungHo, DeNA, and GREE) combined achieved higher operating income and higher net income than all 9 iconic Japanese game companies (Nintendo + SONY-Games + SegaSammy + BandaiNamco + Konami + TakaraTomy + SquareEnix + Capcom + TecmoKoei) combined.

While the newcomer’s revenues are increasing (except for GREE), the traditional 9 game companies’ revenues peaked in 2008, and have been falling rapidly ever since.

Clearly Japan’s the 2003-2005 mergers in Japan’s game sector did not make the sector “future proof” – more dramatic changes will be either initiated by the iconic incumbents, or imposed on them from newcomers such as GungHo.

Note that the position of foreign entrants remain weak in Japan’s game market overall.

Read more in the article below or in our report on “Japan’s game makers and markets”, and in the following post “Brutal disruption of Japan’s Game Markets”.

Three new game companies (GungHo, DeNA, GREE) overtake Japan's 9 iconic game companies in operating profits
Three new game companies (GungHo, DeNA, GREE) overtake Japan’s 9 iconic game companies in operating profits (note that the last data point for 2013 for GungHo is only for the first 6 months, i.e. full year results will show that the “new” game companies are doing even better compared to the “old” game companies than visible in this figure)
Three newcomers (GungHo, DeNA, GREE) achieve higher net profits than all 9 Japanese game icons combined
Three newcomers (GungHo, DeNA, GREE) achieve higher net profits than all 9 Japanese game icons combined (note that the last data point for 2013 for GungHo is only for the first 6 months, i.e. full year results will show that the “new” game companies are doing even better compared to the “old” game companies than visible in this figure)

Japan game market disruption: online and smartphone came company GungHo with Puzzle and Dragons

GungHo started as OnSale KK, a joint-venture between SoftBank and the US company OnSale Inc., the purpose of this JV was Japan market entry for this US company, an ecommerce company.
OnSale KK pivoted from ecommerce to games and started to distribute the Korean game Ragnarok and others, and changed its name to GungHo.
GungHo’s breakthrough came with “Puzzle and Dragons” – Jan-June 2013 operating profits increased 4050.1% (four thousand fifty percent) compared to the same period one year ago. GungHo is part of the SoftBank group.
More in our report on “Japan’s game makers and markets”

Japan game market disruption: GREE

GREE on the other hand – although a successful new venture in Japan’s game sector – is not doing so well currently: reported revenues and income have both been falling. Essentially, GREE has difficulties to implement the plan to build a global business based on their Japanese methods and business models. The factors are both “hard” and “soft”, i.e. business models, and human factors.
Details on GREE’s performance, and reasons for GREE’s current issues in our report on “Japan’s game makers and markets”

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Financial instability of Japan’s electricity companies started in 2007

Financial instability of Japan's electricity companies started in 2007 - long before the Fukushima nuclear accident

Financial instability of Japan’s electricity companies started long before the Fukushima nuclear accident

Japan’s electricity companies ran into financial instability long before the March 11, 2011 disaster

It is often assumed that the financial difficulties of Japan’s electricity companies are caused by the shut-down of almost all Japanese nuclear power stations within 13 months of the Fukushima disaster.

This newsletter shows that the financial impact of switching off Japan’s nuclear power stations does not seem to be the major contribution to the financial instability of Japan’s electricity companies.

However, this newsletter clearly proves that Japan’s electricity companies ran into financial instability long before the March 11, 2011 disaster and long before Japan’s nuclear power stations were switched off. The financial instability of Japan’s electricity companies seem to have started in 2004 – about 7 years before the Tohoku Earth-quake, as shown below. Therefore reform of Japan’s electricity industry sector is highly overdue.

Japan's electricity crisis predates the Fukushima disaster by several years
Japan’s electricity crisis predates the Fukushima disaster by several years

Financial instability of Japan’s electricity companies started with the increase of natural gas payments in 2004

Japan’s electricity industry sector is dominated by 10 regional electricity operators, which to a large extent have the monopolies of electricity business in their regions. In exchange, their profits are calculated as a fixed percentage of costs. However, the figure above shows, that this system had become unstable around 2009 following a strong increase of natural gas costs since 2004. The figure above clearly shows that the net profits of Japan’s 10 regional electricity operators started a steady decline since 2007, and dropped firmly into the red in the financial year FY 2010, which ended on March 31, 2011, ie almost entirely before the Fukushima disaster, and about a year before nuclear power stations were switched off in Japan.
This argument shows, that the difficulties of Japan’s electricity sector are even more profound than the cut-off of nuclear power stations, and shows that reform of Japan’s electricity sector is long overdue. For details read our report on Japan’s electrical industry sector.

Financial trouble of Japan's electricity companies started before Fukushima
Financial trouble of Japan’s electricity companies started before Fukushima

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h2>Financial instability of Japan’s 10 electricity operators started in FY2007 – several years earlier than the Fukushima nuclear disaster

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h2>
This figure shows the combined annual net income of Japan’s 10 regional electricity operators for the period FY1999 – FY2011. The figure clearly shows, that combined net after-tax income was extremely stable until 2007, when net income started to drop dramatically, and has been falling ever since, culminating in combined net losses of over US$ 20 billion in FY2011. Losses are expected to increase even further for FY2012.

This figure clearly shows, that the financial instability of Japan’s electricity companies started several years earlier than the March 11, 2011 disaster and well before any nuclear power stations were switched off. More details in our report on Japan’s electricity and energy sector.

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Fukushima disaster impact on Tokyo [5]: Radiation risk situation for Tokyo, Business risk impact

Fukushima disaster impact on Tokyo : Radiation risk and earth quake and after quake situation for Tokyo, Business risk impact. 5th update of 12 April 2011

5th update on the crisis in Tokyo, focusing on radiation and business impact

Fukushima nuclear accident impact on Tokyo, 12 April 2011

This is our 5th update on the crisis in Tokyo, focusing mainly on the radiation and impact on business in Japan.

The continuing quakes (as shown below) do present risk. To my knowledge, earth quakes are “chaotic” (mathematically speaking), and there is considerable scientific argument that earth quakes cannot be reliably predicted. More in a future newsletter.

The Japanese Government has classified the Fukushima Dai-Ichi accident as a level 7 accident in the INES Scale. The official Japanese Government documents announcing this INES Scale classification can be found here in Japanese and here in English. Note however, that we are dealing here with nature, and human reactions. Nature does not care how we classify such accidents.

Damaged Fukushima reactors are “static” but not yet stable

Gregory Jaczko, Chairman of the US Nuclear Regulatory Commission on April 11, 2011 reported to the US Senate, that the condition of the damaged reactors is ” ‘static’, but with improvised cooling efforts, they are not ‘stable’ “.

Rebuilding is progressing at amazing speed. The Tohoku Shinkansen high-speed train was re-opened Tokyo-Fukushima yesterday, with relay train connections on regular track to Sendai. The full Tokyo-Shin-Aomori line is scheduled to open beginning of May. ANA has started to fly to the repaired Sendai airport.

Radiation measurement results for Tokyo are shown below. Measured radiation levels in Tokyo are now comparable to Austria, and there are many places on earth which have far higher levels than are reported for Tokyo now.

Quakes and after-quakes

The figures show that more than 300 earthquakes of magnitude 5 or larger occurred since the major quake on March 11, 2011 at 14:46. The epicenters of quakes lie mostly where the Pacific Plate moves under the North American Plate on which Tohoku lies.

According to our knowledge earth quakes are mathematically speaking a “chaotic” phenomenon, and scientific arguments are, that it is difficult if not impossible to predict earth quakes with precision. (Figure: Wolfram Alpha LLC)

Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)
Earth quakes of magnitude 5 and greater in Japan (March-April 2011) on logarithmic magnitude scale (Figure: Wolfram Alpha LLC)

Analyzing radiation levels in Tokyo/Shinjuku

Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria
Radiation in Tokyo/Shinjuku (until April 13, 2011) compared to Austria

Radiation levels in Tokyo (Shinjuku and Shibuya) and Tsukuba:

Radiation in Tsukuba (until April 13, 2011) compared to Austria
Radiation in Tsukuba (until April 13, 2011) compared to Austria

The blue curve above shows the radiation levels in Tokyo/Shinjuku as measured and published by the Tokyo Metropolitan Institute for Public Health here:

  • each hour for the last 24 hours
  • daily starting March 1

The red curves show maximum and minimum data as measured by TEPCO in Tokyo-Shibuya, and published here: TEPCO radiation data

The green curves show radiation data measured by Japan’s highly respected AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

Radiation levels in Tsukuba

The green curves show radiation data measured by AIST Laboratory in Tsukuba (Ibaraki-ken, about 60 km north of Tokyo in direction of Fukushima) and published here: AIST radiation data.

The radiation measurement results in Tsukuba are considerably higher than found in Tokyo, but have in the last few days decreased close to the top levels found naturally in Austria and in many other countries.

The differences in the data between Tokyo and Tsukuba could be because Tsukuba is 60km closer to Fukushima, could be cause by weather conditions, but they could also be caused by differences in the measurement equipment or a combination of these factors.

Drinking water (tap water) in Tokyo:

Contamination of Tokyo tap water with I-131 (until April 13, 2011)
Contamination of Tokyo tap water with I-131 (until April 13, 2011)

Analysis of tap water in Tokyo can be found here for each day starting with March 18. This analysis shows that Tokyo tap water currently contains some radioactive Iodine (I-131), and some Cesium (CS-134 and Cs-137) radioactive isotopes.

Interesting in this context is that according to a WHO report on Japan of March 22 (pdf-file), Japanese health limits for radioactive Iodine are about 10 times lower than global standards, ie if Japanese health limits are exceeded, the levels are still at 10% of global limits (we don’t intend to underestimate this problem however).

We conclude that currently radioactive Iodine (I-131) concentrations are about 0.2% of Japan’s limits set by Japan’s Nuclear Safety Commission, and about 0.02% of international health limits, and are currently on a downward trend.

Contamination of tap water with Cesium Cs-134 and CS-137 isotopes (until April 13, 2011)
Contamination of tap water with Cesium Cs-134 and CS-137 isotopes (until April 13, 2011)

Radioactive contamination of drinking water (Cesium)

Cesium contamination with radioactive Cs-134 (1/2-life = 2.1 years) and Cs-137 (1/2-life = 30 years) isotopes is currently on the order of 0.1% of the limits set by Japan’s Nuclear Safety Commission and are on a downward trend.

The relatively long 1/2-life of Cesium-134 and Cesium-137 means that these radioactive isotopes will stay with us for many years. To understand this situation it is necessary to compare these levels with natural levels, and with other sources of radioactivity, and how Cesium interacts with our bodies.

Where to find radiation measurement results (updated March 28, 2011):

Japan’s Government AIST laboratory:
http://www.aist.go.jp/taisaku/ja/measurement/index.html

Japan’s Science and Education Ministry MEXT publishes regional radiation data:
http://www.mext.go.jp/a_menu/saigaijohou/index.htm
http://www.mext.go.jp/english/radioactivity_level/
These data are graphically shown here:
Radiation: http://atmc.jp/
Drinking water: http://atmc.jp/water/
Rain water: http://atmc.jp/ame/

Radiation data for Tokyo/Shinjuku are published here:
each hour for the last 24 hours
for each day starting March 1

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