TOKYO (Reuters) - Hitachi Chemical Co (4217.T) said it failed to properly test parts used to encapsulate semiconductors, the firm’s second compliance failing this year and the latest in a run of such scandals at Japanese manufacturers.

Shares in the Hitachi Ltd (6501.T) unit slid 8 percent on the news. Encapsulation materials account for more than a tenth of its core operating profit, according to Nomura Securities analyst Shigeki Okazaki.

But there were few expectations of a wide-scale recall as most clients normally conduct their own quality inspections.

One client, Toshiba Memory, had been told in late September of improper product testing but its own checks had found no quality problems, a spokesman for the world’s No. 2 producer of NAND chips said.

The products cover chips, protecting them from scratches and debris. Hitachi Chemical is the world’s second-biggest producer of such materials with 17 percent market share after Sumitomo Bakelite (4203.T) which has 20 percent, according to Nomura Securities.

Hitachi Chemical said a committee of external experts was investigating the issue and that it would announce the results as soon as they were available. So far, there has been no finding of illegality or problems with product quality, the company said in a statement.

Weekend reports by local media said that the inspections were not carried out in line with what Hitachi Chemical had agreed with clients.

A Hitachi Chemical spokesman said it had not informed investors sooner as the company was waiting for more information from the committee of external experts. The shares have fallen nearly 30 percent in the past month.

The news follows Hitachi Chemical’s admission in June that it found data falsification in quality tests of lead-acid batteries for industrial use over a period of more than seven years, affecting some 60,000 products shipped to roughly 500 companies.

Other recent compliance scandals at Japanese manufacturers include Kobe Steel Ltd’s (5406.T) admission this year that data fraud had been going on for nearly five decades. Nissan Motor Co Ltd (7201.T) and Subaru Corp (7270.T) have admitted to misconduct in their inspection processes.

KYB Corp (7242.T), a maker of earthquake shock absorbers, said this month that 900 buildings across the country have or may have used its products for which quality data was falsified.</s>TOKYO (REUTERS) - Hitachi Chemical Co has told customers it falsified inspections for a material used in semiconductors, an industry source familiar with the matter said, the latest in a run of compliance scandals at Japanese firms and the company's second this year.

Shares in Hitachi Chemical fell about 10 per cent by mid-morning on Monday, losing more than 30 billion yen (S$370 million) in market value.

The source, who is not authorised to speak to media on the matter and declined to be identified, said the Hitachi unit recently notified customers of improper tests.

Local media reported over the weekend that the material, which is used to protect semiconductors from scratches and debris, is used in a wide range of products such as computers and other electronic devices.

The company said in a statement on Saturday that a committee of external experts was investigating the issue and would announce the results as soon as they were available.

The revelations follow Hitachi Chemical's admission in June that it found data falsification in quality tests of lead-acid batteries for industrial use over a period of more than seven years, affecting some 60,000 products shipped to roughly 500 companies.

Other recent compliance failings at Japanese manufacturers include scandals at Kobe Steel Ltd, Nissan Motor Co Ltd and Subaru Corp.

The Tokyo Stock Exchange on Monday issued a warning to investors, citing a lack of clarity around the Hitachi Chemical issue.</s>TOKYO (Reuters) - Hitachi Chemical Co has told customers it falsified inspections for material used to encapsulate semiconductors, an industry source familiar with the matter said - the firm’s second compliance failing this year and the latest in a run of such scandals at Japanese firms.

Shares in the Hitachi Ltd unit tumbled 8 percent on the news. While the exact nature of the falsification is not known, the likelihood of a wide-scale recall is seen as slim as most clients normally conduct their own quality inspections.

“Therefore it may be the case that there are no major quality issues with the actual encapsulation materials,” Nomura Securities analyst Shigeki Okazaki wrote in a note to clients.

The source, who is not authorized to speak to media on the matter and declined to be identified, said Hitachi Chemical recently notified customers of improper tests.

Hitachi Chemical said in a statement on Saturday that a committee of external experts was investigating the issue and that it would announce the results as soon as they were available.

Local media reported at the weekend that the inspections were not carried out in line with what Hitachi Chemical had agreed with clients.

The material is used to protect chips from scratches and debris. Hitachi Chemical is the world’s second-biggest producer of such materials with 17 percent market share after Sumitomo Bakelite, which has 20 percent, according to Nomura’s Okazaki.

He noted that encapsulation materials account for over 10 percent of Hitachi Chemical’s core operating profit.

The Tokyo Stock Exchange on Monday issued a warning to investors about uncertainty surrounding the issue.

The 8 percent share slide represents a loss in market value of around 20 billion yen ($180 million), exacerbating recent slides. The stock has lost about 28 percent this month alone.

Sumitomo Bakelite saw its stock climb 2.6 percent on Monday, outperforming a 0.4 percent gain for the broader market.

The revelations follow Hitachi Chemical’s admission in June that it found data falsification in quality tests of lead-acid batteries for industrial use over a period of more than seven years, affecting some 60,000 products shipped to roughly 500 companies.

Other recent compliance scandals at Japanese manufacturers include Kobe Steel Ltd’s admission this year that data fraud had been going on for nearly five decades. Nissan Motor Co Ltd and Subaru Corp have admitted to misconduct in their inspection processes.

KYB Corp, a maker of earthquake shock absorbers, said this month that 900 buildings across the country have or may have used its products for which quality data was falsified.</s>TOKYO (Reuters) - Shares in Hitachi Chemical Co (4217.T) slumped more than 14 percent on Monday following media reports that it had falsified inspections for a material used in semiconductors.

Hitachi Chemical notified its customers of the inspection misconduct for the material used to protect semiconductor chips from scratches and debris, local media reports said at the weekend.

The company said in a statement on Saturday a committee of external experts was investigating the issue. It said it would announce the results as soon as it received a report from the committee.</s>MILAN (Reuters) - Hitachi has reached an agreement to buy the stake held by U.S. fund Elliott in Ansaldo STS and will launch a tender offer for all the shares of the Italian rail-signaling company, the Japanese group said on Monday.

Hitachi and investment funds led by Elliot have been feuding since the Japanese company took a majority stake in Ansaldo STS, with the funds complaining about the price paid in the public offer by Hitachi, as well as Ansaldo’s strategy and governance.

Under the deal, Hitachi will buy the 31.79 percent stake that Elliott owns in Ansaldo STS, paying around 807.58 million euros ($920 million). It will then launch a bid for the rest of Italian company with the aim of delisting it.

Hitachi will buy shares in Ansaldo STS at 12.70 euros, offering a premium of around 9.5 percent on Friday’s reference closing price of 11.60 euro.</s>Zacks Investment Research downgraded shares of Hitachi (OTCMKTS:HTHIY) from a hold rating to a sell rating in a report issued on Thursday morning.

According to Zacks, “Hitachi Ltd., headquartered in Tokyo, is one of the world’s leading global electronics companies. They manufacture and market a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. “

Shares of OTCMKTS:HTHIY opened at $59.04 on Thursday. Hitachi has a fifty-two week low of $56.93 and a fifty-two week high of $85.54. The firm has a market capitalization of $28.53 billion, a price-to-earnings ratio of 10.36, a P/E/G ratio of 0.58 and a beta of 0.99. The company has a current ratio of 1.35, a quick ratio of 0.96 and a debt-to-equity ratio of 0.16.

Hitachi, Ltd. provides information and telecommunication systems, social infrastructure and industrial systems, electronic systems and equipment, construction machinery, high functional materials and components, automotive systems, smart life and ecofriendly systems, other products, and financial services in Japan and internationally.

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Receive News & Ratings for Hitachi Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Hitachi and related companies with MarketBeat.com's FREE daily email newsletter.</s>TOKYO, Oct 29 (Reuters) - Japanese stocks handed back earlier modest gains and slipped on Monday as continuing weakness in U.S. and Chinese shares dampened investor sentiment.

The Nikkei ended the morning session down 0.09 percent at 21,165.30 points, remaining on the defensive after posting their biggest weekly loss in more than eight months.

The broader Topix was down 0.27 percent at 1,591.63.

Wall Street shares fell on Friday after technology and internet shares sold off further, capping another volatile week for U.S. stocks.

The Asian markets followed on Monday, with the Shanghai Composite Index losing 1.5 percent.

"Bargain hunters did come in to take advantage of price dips as the market experienced such a steep decline last week. But much of the action was futures-led and the rebound lacked strength," said Yoshinori Ogawa, senior strategist at Okasan Securities.

"It will require some time for the market to regain its confidence. If sentiment was healthy, reaction to reports of upbeat earnings prospects, notably Sony, would be stronger," Ogawa added.

Sony Corp was down 0.9 percent, shrugging off a report in the Nikkei business daily that the company's consolidated operating profit for the April-September fiscal period was likely to reach a record high.

Kourakuen Holdings Corp soared 12.4 percent after the restaurant chain operator raised its net profit forecast for the year through March 2019 to 739 million yen from 269 million yen.

Another company boosted by upbeat earnings prospects was Shin-Etsu Chemical Co, which gained 6.8 percent after lifting its net profit forecast for the year through March 2019 to 290 billion yen from 270 billion yen thanks to growth in its U.S. chemical and semiconductor silicon businesses.

Hitachi Chemical Co, on the other hand, sank 8.2 percent following media reports that it had falsified inspections for a material used in semiconductors.

Tokyo Tekko Co retreated more than 10 percent as the steel bar maker cut its net profit forecast for the year through March 2019 to 2.5 billion yen from 3.76 billion yen amid a rise in scrap iron prices. (Editing by Kim Coghill)</s>MILAN (Reuters) - Hitachi (6501.T) has wrapped up a bitter feud with U.S. activist investor Elliott over Ansaldo STS (STS.MI), agreeing to buy the fund’s stake in the Italian rail signaling group as part of a move to take full control.

The Japanese conglomerate could spend as much as 1.25 billion euros to become the sole owner of Ansaldo STS, which it said would have a leading role to play in growing its rail business, including through acquisitions.

Hitachi and investment funds led by Elliott have been rowing since the Japanese company took a majority stake in Ansaldo STS in 2015, with Elliott - which holds a minority stake - complaining about the price paid by Hitachi as well as Ansaldo’s strategy and governance.

Under the deal announced on Monday, Hitachi will pay a premium of 9.5 percent to buy Elliott’s 31.79 percent stake in Ansaldo STS, costing it around 807.6 million euros ($920 million).

It will then launch a bid for the rest of Italian company with the aim of delisting it.

Hitachi will buy Elliott’s shares in Ansaldo STS at 12.70 euros. The mandatory bid on residual shares will then be launched at the same price.

Ansaldo STS shares rose more than 9 percent to a session high of 12.68 euros, matching the offer price.

Owned by U.S. hedge fund manager Paul Singer, Elliott is an outspoken investor in many European and U.S. companies.

In 2015 Elliott refused to sell its Ansaldo STS shares to Hitachi in a previous public offer on the Italian company, judging the 9.50 euro per share price offered then too low.

The railway industry was shaken last year when Alstom (ALSO.PA) and Siemens (SIEGn.DE) announced a plan to merge their rail units into a Franco-German champion to stave off competition from bigger Chinese rival China Railway Rolling Stock Corporation and Canada’s Bombardier Transportation.</s>State Bank of India (SBI) and Hitachi Payment Services Private Limited (Hitachi Payments), India ; a wholly owned subsidiary of Hitachi, Ltd., Japan have signed a definitive agreement to enter into a joint venture for the establishment of a state-of-the-art card acceptance and future ready digital payment platform for India. The JV agreement is subject to requisite regulatory approvals.

The JV combines the unparalleled distribution network, customer trust of SBI with cutting edge technology and services of the Hitachi Group in areas such as digital payments technology, services, big data, analytics and artificial intelligence. The JV will provide comprehensive suite of payment options to customers and merchants focusing on areas such as roll-out of a nationwide card acceptance infrastructure, quick response (QR) code acceptance, Unified Payment Interface (UPI), mass transit sector and e-commerce businesses.

Speaking about the joint venture, Rajnish Kumar, Chairman, SBI said, “At 2,500 PoS per million people, the penetration of payment acceptance infrastructure is still low. With this JV, we aim to grow the payment landscape by providing a frictionless modern digital payment platform to our customers. In Hitachi Payments, we see a long-term business and technology partner that has the ability, capability and willingness to develop the broad vision of SBI which is tied into the success of the digital payment imperatives of the country. SBI also believes that the future of the payment services lies in the capability of the JV to develop new digital acquiring strategies for the benefit of its consumers.”

Toshiaki Higashihara, President & CEO of Hitachi, Ltd.,Japan; said, “Along with the accelerating movement of digitization around the world, Hitachi aims to improve people’s lives by providing digital solutions in India and other countries. By establishing the joint venture with SBI, Hitachi will further contribute to the development of digital payments in India by building a state-of-the-art digital payments platform and leveraging SBI’s robust customer network.”

Bharat Kaushal, Managing Director of Hitachi India Pvt. Ltd., said “Under the India Government’s “Digital India” initiative, India is progressing towards becoming a knowledge economy with technology as the pivot. Hitachi is aiding in development of India’s social infrastructure as well as giving a fillip to the economy. This mutually benefiting partnership with the financial giant SBI will allow us to widen our footprint pan India.”

If you have an interesting article / experience / case study to share, please get in touch with us at [email protected]</s>India’s largest lender State Bank of India (SBI) has formed a joint venture ‘SBI Payment Services Private Limited’ in partnership with Hitachi Payments Services, a subsidiary of Japan’s Hitachi, for the establishment of card acceptance and future-ready digital payments platform in India, according to a joint statement on Monday. Hitachi Payments will pick a 26% equity stake in SBI Payment Services, while the rest will be held by SBI.

As part of the partnership, Hitachi – which manages more than 55,000 ATMs and 0.85 million PoS devices across the country – will contribute to the development and augmentation of digital payments service in the country by creating an online platform. SBI and Hitachi will now seek regulatory approvals for the joint venture.

The two companies will integrate each other’s strengths such as Hitachi’s digital technologies like artificial intelligence and big data analytics, and SBI’s large customer base, branch network as well as brand trust.

In October last year, the state-run lender had shortlisted Worldline, Hitachi and First Data Corporation for the proposed JV. It had also proposed to transfer its business of deploying credit card swipe machines to the JV. The joint venture will also mark Hitachi’s foray into a new business segment – the merchant acquiring business in India.

“Financial services market in India is making remarkable progress led by economic growth, financial inclusion policy and Digital India initiatives. Bank account holders have increased substantially in the past few years and as a result, banking transactions on ATMs and digital transactions have correspondingly increased dramatically,” it said.

With over 6 lakh point of sale (PoS) terminals and 420 million customers, SBI currently is the largest merchant acquirer in the market in terms of terminals through its subsidiary SBI Payment.

According to SBI Chairman Rajnish Kumar, the penetration of payment acceptance infrastructure is still low, given the 2,500 PoS per million people. “With this JV, we aim to grow the payment landscape by providing a frictionless modern digital payment platform to our customers,” he added.

Payments companies are using futuristic technologies such as artificial intelligence to provide personalised payment experience to their customers. About 83% of the Indian bankers think that artificial intelligence will work alongside humans over the next two years, quite higher than the global average of 79%, according to a recent report ‘Banking Technology Vision 2018’ by Accenture.
Japanese company Hitachi Chemical states that it falsified inspections for a material used in semiconductors.