First AI-Generated Manga

Akihabara News (Tokyo) — The science fiction manga Cyberpunk: Peach John is the world’s first manga created entirely with image-generation Artificial Intelligence (AI).

The author, known only by his pseudonym Rootport, used the Midjourney program to create the images for the work. Midjourney is an AI program created by a San Francisco-based independent research lab.

Rootport has never drawn a manga by hand and, according to their own statements, is not proficient as an artist.

Rootport provided characters with particularly eye-catching features, such as dog ears or pink hair, because the Midjourney program is not able to display characters with different facial expressions or in a wide variety of poses. The character designs were, in fact, compiled by the AI based upon verbal descriptions offered by Rootport,

The production of the manga, which runs a little over one hundred pages, took only six weeks to complete.

Hand-drawn manga of a similar length routinely take several months or even years to produce.

One challenge to the spread of AI-generated manga is the issue of copyright. The images are likely to be based upon large datasets of existing works.

Another question is whether or not AI-generated manga will meet with fan acceptance. For example, many anime fans became upset when it was revealed that AI had been used to compose the entire background setting for a short Netflix film called The Dog and the Boy.

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Meta’s Longshot Bid to Take on Twitter

Akihabara News (Tokyo) — Meta, the parent company of Facebook, is working with Mastodon on a longshot bid to take on Twitter.

Last October, Tesla and SpaceX entrepreneur Elon Musk completed a controversial takeover of the social media platform Twitter, an event which drove many long-time users off the network in protest. Since that time, there has been headline after headline criticizing Musk’s decisions and his heavy-handed management style.

Last November, Musk himself raised the possibility that Twitter could go bankrupt by the end of 2023.

Twitter has always struggled with profitability, but it nevertheless established itself firmly as a leading social media platform for journalists, policymakers, and political discussions. At a government level, it exercises an outsized impact in relation to its size as measured by its number of users.

Since his takeover, Musk has been ruthless in regard to staffing and personnel issues. More than 50% of Twitter’s workforce has either been fired or driven to resign from the company.

This has included engineers and others who were critical to the technical operation of the platform. As a result, problems have routinely appeared in its daily operations and user services.

This, in turn, has only heightened criticism of Musk’s leadership.

The Twitter alternative which gained the most attention at the end of last year was Mastodon, a decentralized platform utilizing the ActivityPub protocol. This enables data exchange and communication between independent servers.

Due to the spike in interest, Mastodon, as of this month, has about 6.5 million users, but only about 1.3 million are regarded as being “active users.”

In comparison, Twitter boasts hundreds of millions of active users. The exact figure is disputed, but most accounts put it above 400 million people.

Meta has yet to release a name for its potential Twitter challenger, but it is known that it aims to utilize the same ActivityPub protocol as does Mastodon. This platform will in some way carry Instagram branding.

As should be apparent, whatever the problems of Musk-run Twitter have been, Meta faces a formidable challenge in trying to capture this market.

There will be little leeway for mistakes, either technical issues or public relations fiascos. This could include controversies over platform moderation; a matter which has tripped up more than one social media platform. This is especially true because public opinion on free speech is itself deeply divided.

Another major challenge will be marketing. Even possessing the advantage of operating the Facebook and Instagram platforms, Meta will need to generate enough public interest to convince large numbers of people to register and to begin using an entire new social media platform.

Since this platform will be similar to what Twitter already offers, this could prove to be a tall order.

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Akihabara Video Game Arcade Revival

By Phoebe Ma

Akihabara News (Tokyo) — Entertainment businesses were heavily impacted by Covid, and the video game arcades in the Akihabara district of Tokyo suffered more than their fair share of the damage. However, a stroll down Chuo Dori reveals that Akihabara arcades are witnessing a return of some of their old energy.

Game arcades in Akihabara are, of course, one of icons of modern Japan. Not only do many Japanese young people flock to this neighborhood, but it is also high on the list for many foreign tourists visiting Japan as well.

It does need to be acknowledged, however, that in recent decades Akihabara has largely remained much the same while some other parts of the capital city have transformed dramatically. In many ways, Akihabara does not seem as comparatively cutting-edge as it did back in the late 20th century.

But the other side of that same coin is that Akihabara’s game arcades, once viewed as ultra-modern, have now gained an extra layer of appeal based on nostalgia for that earlier era.

Inside the arcades, it is by no means rare to hear people speaking in languages other than Japanese, reflecting the fact that the area remains a major draw.

In many of the game arcades, the first and second floors are dominated by crane machines. On our visits, few customers could be found using them. But on the higher floors, where the video game arcades are located, it is not uncommon that they are quite busy.

Many young couples spend their dates in these game arcades, and groups of students also come here seeking fun after school ends.

In the Covid era, machines are being regularly sterilized by staff to comply with sanitary regulations.

A final point worth mentioning is that spending time playing video games in Akihabara is a relatively low-cost form of entertainment in Tokyo, which also helps explain why so many young people can be found here.

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The H3 Rocket Fails Again

Akihabara News (Tokyo) — The H3 rocket, built to become a mainstay of Japan’s space program, met a disastrous end as it attempted its first launch this week.

The Japan Aerospace Exploration Agency (JAXA) and Mitsubishi Heavy Industries, which have collaborated on this crucial program, hit the self-destruct for the rocket after about seven minutes after it launched. The reason was that the second stage rocket had failed to fire.

This mishap extends a series of disappoints regarding this vehicle. Its launch was already about two years behind schedule, and last month it also failed to operate properly due to an electronics failure, leaving it sitting on the launch pad.

The H3 was carrying the Advanced Land Observing Satellite-3 (ALOS-3) when it was ordered to self-destruct.

This satellite was intended to become one of Japan’s key tools for disaster management and countermeasures for both the central and local governments. Its loss potentially sets back efforts to grasp the damage situation on the ground in the wake of disasters.

Additionally, the Ministry of Defense had an infrared sensor installed within the ALOS-3 which was being developed to detect military missile launches.

The H3 rocket has been designed to be about half the price, more powerful, and safer than its predecessor, the HIIA rocket–a model which has been scheduled to be phased out next year.

JAXA has been having a bad run in recent months. Last October, it ordered a smaller Epsilon-6 rocket to self-destruct after launch when it deviated from its planned trajectory.

Japan has placed great hopes in the H3 rocket amidst intense competition in the international space industry, especially with the rise of private companies like SpaceX joining the space race.

Among other missions, in the future the H3 is meant to transport large cargo capsules to the International Space Station.

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Casino Internships in Korea

Akihabara News (Tokyo) — Japan Casino School, which specializes in training card game dealers, has launched an internship program in cooperation with Paradise Casino in South Korea.

Japan Casino School sees this new program as part of national efforts to have competent, trained Japanese dealers available when Japan opens its own casino resorts, now being considered for Osaka and Sasebo in the first round of development.

Successful applicants will spend three months gaining practical experience at either Paradise Casino Walkerhill in central Seoul or Paradise City in Incheon.

The first internships, which are paid positions, begin in April. It is open to anyone over 19 years old, so applicants can be at the beginning of their professional careers or much older people looking for a second career.

There are about twenty casinos throughout South Korea, though all but one, Kangwon Land, are legally limited to host only foreign nationals.

Paradise City, one of the two possible locations affiliated with this internship program, is a joint venture between South Korea’s Paradise Group and Japan’s Sega Sammy Holdings.

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Tokyo Eyes Offshore Wind Power

Akihabara News (Tokyo) — The Tokyo Metropolitan Government is sailing along with the trend towards the development of offshore wind power.

At the end of last week, the metropolitan government unveiled its “Tokyo Remote Island Development Plan,” covering the next ten years. One of the most notable new initiatives announced is the concept of building offshore wind power facilities at Izu Oshima island, which has a population of over 8,000 people.

According to the official in charge at the Oshima town government’s Waterworks and Environment Division, it is still very early in the process. There are a number of challenges facing the offshore wind power initiative.

The two largest hurdles are that there is yet to be any business feasibility study and that it is not yet clear if the Tokyo Electric Power Company (TEPCO) will cooperate in establishing the needed connection to the electricity grid.

Moreover, the project will require a separate budgetary allocation and local fishermen will need to provide their consent.

If the project does go forward, it is expected to involve, at least initially, a 2MW floating wind demonstration project along the west side of the island.

The Oshima town office estimates that the realization of this small wind farm is at least three years distant.

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Four eVTOL Models at 2025 World Expo in Osaka

Akihabara News (Tokyo) — The organizers of the 2025 World Expo in Osaka have selected four eVTOL models which will offer air taxi services and launch the industry in Japan. Only one of the models is Japanese, while the other three are being developed in Western nations.

The Japanese model is, of course, the SkyDrive SD-05, which has become something like Japan’s champion in the global race for urban air mobility.

Joby Aviation is a California-based firm, though with strong financial links with Toyota. ANA Holdings will be the operator for the Joby aircraft during the Expo.

The United Kingdom will be represented by Vertical Aerospace and its VX4 aircraft. Japan Airlines will be flying this model.

Finally, the German firm Volocopter will have its VoloCity eVTOL transporting passengers through the skies, operated by its Japanese partner, Marubeni Corporation.

The air taxi services at the event will run between the Smart Mobility Expo on Yumeshima island and a number of locations within central Osaka and perhaps elsewhere.

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Toray Bids to Become Leading Supplier for eVTOLs

Akihabara News (Tokyo) — Toray Industries is aiming to get a jump on its competitors by establishing the first base for the development of carbon fiber materials specifically aimed at supplying the nascent eVTOL industry.

According to a report in the Nihon Keizai Shinbun–yet to be officially confirmed by the company–the plan calls for the creation of a facility in Nagoya that will include an open lab for joint research with client companies and universities which can host about 140 researchers. This facility will employ Artificial Intelligence with the objective of developing carbon fiber materials for lighter airframes, thus improving the performance of the aircraft.

Toray’s investment in the eVTOL research base is expected to run at about ¥6 billion (US$45 million) and to open its doors in 2026.

Toray is known to already be a carbon fiber supplier for eVTOL-makers Lilium and Joby Aviation, and it clearly aims to become a leading–perhaps the dominant–supplier for the global industry.

The partnerships with Lilium and Joby were both announced in 2020; July in the former case and December in the latter. Joby Founder and CEO JoeBen Bevirt declared at the time that Toray’s carbon fiber materials “provide unparalleled specific strength and toughness, which have enabled Joby to develop aircraft with unprecedented capabilities.”

Toray already plays a key role in the international aviation market. It is the world’s largest manufacturer of carbon fiber materials with a market share of around 30%.

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Choshi Sees Tourism Benefit from Wind Farm

Akihabara News (Tokyo) — As part of its preparations for hosting a 391MW offshore wind farm, the city of Choshi is thinking beyond conventional facilities.

“We want to use offshore wind power to promote tourism and regional development,” explained Mayor Shinichi Koshikawa said at a press conference earlier this month.

The Choshi wind farm is one of the three zones awarded in December 2021 to Mitsubishi Corporation-led consortiums, but unlike the other offshore wind projects which have so far been awarded, it sits in Chiba Prefecture on the edge of the Kanto plain, with a regional population in excess of 43 million people.

“The sight of large windmills lined up on the sea can be expected to increase the number of visitors, including tourists, as a new scenic resource,” explains Takashi Hakkaku, chief examiner of the city government’s offshore wind power promotion office.

Hakkaku further notes that they’ve already mapped out a basic tour route, including an observation hall and the marina area, at which they hope to offer environmental education programs in cooperation with local businesses in the fields of tourism, accommodation, and transportation.

More conventionally, sections of the local Naarai Port will become a base for offshore wind related maintenance facilities, including warehouses and offices.

The first onshore construction for the Choshi wind farm is scheduled to begin in January 2025, with full operations anticipated for launch in September 2028.

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Mitsui Fudosan Backs Space Industry

Akihabara News (Tokyo) — Major real estate developer Mitsui Fudosan is creating a hub for Japan’s space industry in the Nihonbashi district of central Tokyo.

The company has outlined its plans for what it calls Cross U, which will aim to help space-related private firms and universities to form networks and to share information.

Mitsui Fudosan President and CEO Masanobu Komoda explained at a press briefing that “it is important for industry, government, and academia to work without barriers, rather than companies working alone… Through the development of the space industry, we will strengthen Japan’s industrial strength and lead the way toward resolution of global issues.”

An agreement has been signed with Japan Aerospace Exploration Agency (JAXA) by which it will actively participate and support activities at Cross U.

About two hundred companies and organizations are expected to become Cross U members within five years

In April, the X-Nihonbashi Base will be opened within the Tokyo Nihonbashi IT Building. This facility will serve as a co-working and event space, and it will include a bar lounge. JAXA and some space industry startups will set up offices within this facility.

Cross U is chaired by Shinichi Nakasuka, professor of the Graduate School of Engineering at the University of Tokyo.

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A Foundation for Japanese Vertiports

Akihabara News (Tokyo) — Osaka-based SkyScape has made a major stride towards realization of its ambition to become a leader in the emerging Japanese vertiport industry, pulling in exclusive contracts with two foreign firms it believes will help it establish a strong foundation in the Japanese market.

“We would love to have a SkyScape network of locations; to be able to offer benefits within that network to the actual facility owners and the communities in which these facilities are based,” explains SkyScape Founder and President Asa Quesenberry in an exclusive interview with Akihabara News.

SkyScape is now describing itself as a “vertiport development and management company” to emphasize that it will not have a one-size-fits-all facility design or business model, but rather will respond flexibly to accommodate a variety of specific circumstances, as well as to take advantage of changes in the market.

Quesenberry anticipates that once the first commercial vertiports are built–presumably around 2025–they will initially operate at a loss. However, that is expected to change later in the decade as eVTOL traffic expands and air taxis become more popular.

Netherlands-based Bayards Vertiport Solutions is part of the Bayards Group, bringing in a company with over sixty years of experience and a large portfolio in aviation facility development. This helps add heft to the initiative, which previously involved only the small Japanese startup.

This alliance also makes clear that early generations of SkyScape vertiports will use aluminum as their primary construction material.

“Aluminum makes sense for us,” explains Quesenberry. “They need to be mobile; they need to be lightweight; they need to be strong. Aluminum does all of those things.”

The other new partner is Cincinnati-based SafeHub Systems, which is developing a high-technology check-in and screening system.

“We wanted a really smooth and innovative approach to the passenger check-in experience at our vertiport facilities,” Quesenberry notes. This will involve creating a seamless process for the prospective eVTOL passengers to be weighed and scanned before they board the aircraft.

As has been the case since the outset, “modularity” remains a key organizing principle for SkyScape’s vision, and this will manifest in physical form with several modules being grouped together to form each individual vertiport.

Exactly which modules will appear at a given facility will depend on local needs and agreements with the owners and operators. The potential variety and sophistication of these modules is likely to grow over time in concert with the growth of the overall industry.

“We’ve got it boiled down to about ten to twelve different use cases you can imagine for a vertiport facility,” Quesenberry reveals.

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MGM May Become “Sole Operator” in Japan Casino Market

Akihabara News (Tokyo) — Executives at MGM Resorts International have publicly hinted that their casino resort planned for construction on the manmade island of Yumeshima in Osaka Bay may become the only one licensed in the Japanese market of over 125 million people.

In an investor earnings call conducted this week, MGM President and CEO Bill Hornbuckle dropped the hint two times.

In his opening presentation, he stated, “we’re extremely excited for the [return on investment] opportunity in a market in which we may be the sole operator for some time in the future.”

Later, during the question and answer session, he added, “I’m excited to think that we may be the only player. And so, instead of a market of 19 million people, we’re talking about a much larger market.”

The 19 million people is clearly reference to the Kansai region; the “much larger market” is, presumably, all of Japan.

Given the context, two points stand out.

First, given that the central government, in Hornbuckle’s words, “is going through and consistently asking us questions about the project, about the contract with the government of Osaka, etc.,” this strongly suggests that MGM fully anticipates that its Integrated Resort (IR) is on track for approval.

It also suggests MGM believes that the Casinos Austria International casino resort project in Nagasaki Prefecture will not be approved. If it were, then Hornbuckle would not be talking about becoming “the sole operator” in the Japanese market, but rather he would be emphasizing its likely status as the largest operator.

However, Hornbuckle also made clear that MGM feels no confidence about exactly when the central government will make its licensing decision public, and that the continuing delays are probably pushing the opening of the MGM-Orix IR into the early 2030s.

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Okada Manila Hit by Fresh Lawsuit

Akihabara News (Tokyo) — In the Game of Thrones-like saga that management of the Okada Manila casino resort has become, there is yet another twist; a potential partner has filed a lawsuit over alleged broken promises.

This particular dispute traces back to October 2021 when it was announced that Tokyo-based Universal Entertainment Corporation–the ultimate owner of Okada Manila–had reached a merger agreement with Miami-based 26 Capital Acquisition Corporation, a special purpose acquisition company, which would see the casino resort listed on the Nasdaq stock market in New York.

The original transaction set an enterprise value for Okada Manila at US$2.6 billion, and involved a cash injection of US$275 million.

26 Capital Acquisition Chairman and CEO Jason Ader explained at the time: “Okada Manila is the future of the gaming market in Asia and poised for tremendous growth. With its beautiful new facility, a desirable location in one of the fastest-growing gaming markets in the world, and potential for industry-leading margins and cash flow conversion, I believe the Okada Manila is an extremely compelling investment.”

The initial press release noted that “the transaction is expected to close in the first half of 2022.”

The merger plans derailed, however, when the Supreme Court of the Philippines issued its shocking order in April 2022 that the former owner, billionaire Kazuo Okada, should be restored to the role which he had played before being removed in 2017. Okada followed this up a month later by having armed agents storm the casino resort and take physical control of the facility by force.

During this turbulent period, Ader publicly and repeatedly backed the position of Universal Entertainment’s management in Tokyo, telling the media that Okada’s takeover had been “totally illegal.” He added that “we think that Universal will be back in control of the property very soon.”

Indeed, three months later, in early September, Universal Entertainment, backed by the Philippine National Police, seized back control of the casino resort. It has retained authority in a stable fashion since that time.

The latest twist is that 26 Capital Acquisition filed a lawsuit in the US state of Delaware against Universal Entertainment, its prospective partner, alleging that the Tokyo firm is now unreasonably dragging its feet on consummating the planned merger. Universal Entertainment has been back in control for about five months, and apparently their American partners figure that it is past due time to complete the agreed transaction, which is already more than seven months overdue in relation to the original announcement.

Notice of the new lawsuit so far has come only from Universal Entertainment’s side. In its statement issued this week, the Japanese firm offered only a short message regarding its outlook: “The company will scrutinize the lawsuit and properly deal with it. The company will promptly announce progress that should be disclosed.”

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Militarization of Japan Aviation Industry

Akihabara News (Tokyo) — Conflicting reports over the fate of the Mitsubishi Heavy Industries SpaceJet program has again highlighted the cloudy outlook for Japan’s passenger jet industry, and the firm may be looking toward militarization as its escape hatch to profitability.

SpaceJet was launched fifteen years ago with high hopes. Mitsubishi Heavy Industries has reportedly spent about ¥1 trillion (US$7.5 billion) to create a passenger jet model which would seat about eighty people. But the project has faced serial delays and disappointments.

The company suspended the project in October 2020 and, according to a Kyodo News report released this week, the plug is about to be pulled completely.

However, Mitsubishi Heavy Industries balked at that report, issuing a short press release which reads:

There were multiple reports that the development of the SpaceJet project had been discontinued, but this was not announced by our company or our subsidiary, Mitsubishi Aircraft Corporation.
It is true that we are considering various possibilities, but we will promptly announce any matters that should be disclosed in the future if they are decided.

While this is not exactly a denial, it does indicate that the firm is still grappling with its policy direction.

Sources agree that a key problem for Mitsubishi Heavy Industries is that pushing forward with the SpaceJet project doesn’t make sense economically. Although it has hundreds of orders for its jet, the US Federal Aviation Administration may not grant it a type certificate–a matter which would cripple its commercial prospects.

However, there is a third option for Mitsubishi Heavy Industries aside from moving forward with SpaceJet or cancelling it altogether; that is to shift from commercial aviation to military aviation.

It was reported last December that the company would be involved in a Japan-UK-Italy project to develop a sixth-generation fighter aircraft by 2035. Moreover, Defense Minister Yasukazu Hamada announced that profit margins for private companies with military contracts are being revised upwards to 15%. He even describes the strengthening of Japan’s military-industrial complex as “an urgent task” for the government.

It may thus be that Mitsubishi Heavy Industries is about to pivot toward a return to its prewar history, when it designed and produced Yamato-class battleships and the Mitsubishi A6M Zero fighter aircraft. The firm may be about to become once again a premier weapons manufacturer and exporter, in line with the Kishida administration’s decision to massively boost the nation’s military budget.

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Aerwins Listed on Nasdaq

Akihabara News (Tokyo) — Aerwins Technologies has become the first Japan-origin eVTOL firm to be listed on the Nasdaq Stock Market in New York.

This listing was done via a merger with the special purpose acquisition company Pono Capital, a Hawaii-based firm.

Trading on the Nasdaq Global Market under the ticker symbol AWIN is expected to begin today.

Aerwins Chairman and CEO Shuhei Komatsu commented, “Japan was a manufacturing country for so many years. Precision is rooted and based in Japanese culture. We will continue to pursue the possibility of new mobility with the Japanese culture-centric mindset on our path to becoming a global company. I understand it is a big responsibility to talk about these ideals; I recognize that it is necessary to have the ability to deliver, so I will devote myself to this vision every day.”

Daisuke Katano, who is CEO of Aerwins’ subsidiary in Japan, A.L.I. Technologies, added, “My dream in life is to create a company that will take the world by storm with the power of technology originating in Japan. With this listing in the United States, I believe that we have finally reached the starting point of our global expansion.”

The company’s most prominent product is the XTurismo Special Edition hoverbike, which is already being sold and delivered to customers.

It’s lower profile offering is its air mobility platform C.O.S.M.O.S. (Centralized Operating System for Managing Open Sky).

After listing, the value of the company is expected to be put at about US$600 million.

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Reorganization at Aruze America

Akihabara News (Tokyo) — Japan-based slot machine and gaming table manufacturer Aruze has announced the reorganization of its unit in the United States.

There have been two major announcements this week. The first of these was the departure of its US branch president Robert Ziems, which will occur at the beginning of next month.

While no reasons were provided for parting ways with Ziems, given that no replacement has been lined up, we can surmise that it developed rather suddenly. Global CEO of Aruze Gaming Group Yugo Kinoshita will be stepping in to take over day-to-day operations while the recruitment process for a new head of the US branch is conducted.

In even more dramatic news, the firm announced that Aruze Gaming America is filing for bankruptcy.

Kinoshita commented: “This filing was a critical business strategy we were forced to make due to external factors outside our control. We fully understand the implications associated with this action, but we believe this is the best way for Aruze to maintain the overall health of our business. This restructuring has no reflection on the health of Aruze.”

Without providing details, the company’s statement did make clear that the bankruptcy filing was triggered by “a recent garnishment judgment against Aruze resulting from a separate judgment against Aruze’s shareholder.”

According to Aruze, what is occurring is a “financial restructuring” rather than a collapse of the company, and that it “intends to continue operating normally.”

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Laser Communication in Space

Akihabara News (Tokyo) — Tsukuba-based startup WarpSpace has selected its laser supplier for the communications network which it will soon establish in outer space.

WarpSpace was founded in August 2016 based on personnel who mainly have associations with the University of Tsukuba and the Japan Aerospace Exploration Agency (JAXA).

The primary challenge the firm aims to solve relates to the fact that there are many operators of low Earth orbit satellites which are having growing difficulty transmitting high volumes of information from their satellites (routinely engaged in Earth observation missions) to their ground stations. This is because a sort of bottleneck has developed when it comes to gaining permission to use specific radio frequencies. Moreover, the number of radio frequency bands available is in any case limited.

The solution soon to be offered by WarpSpace is its WarpHub InterSat system. This will involve putting its own satellites into medium Earth orbit, where they can collect customer satellite data via laser communication and then relay it, again by laser, to the ground stations in an uninterrupted and near realtime fashion.

This service will be made available to customers–low Earth orbit satellite operators–on a commercial basis.

WarpSpace expects that its WarpHub InterSat system will be launched into space and made operational in stages over the course next few years.

In the latest news, it was announced last week that WarpSpace has selected Munich-based Mynaric as its supplier for its communications lasers, in particular Mynaric’s Condor Mk 3 terminals.

Mynaric executive Tina Ghataore commented, “We are grateful for WarpSpace to entrust us with the laser communication capabilities needed for their optical data relay satellite network.”

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Toyota Transformation Doubtful

Akihabara News (Tokyo) — The leadership shuffle at the top of Toyota Motor Corporation came as a surprise, at least in terms of its timing, but there’s yet little reason to expect any dramatic transformation in the giant Japanese automaker, which is in increasing danger of becoming roadkill in the shift toward zero-carbon transportation.

President and CEO Akio Toyoda will be stepping away from the day-to-day management of the firm in April and handing the reins to 53-year-old Koji Sato, who is currently in charge of the Lexus brand.

However, Toyoda isn’t going very far. He will become chairman of the board and possibly has his eye on becoming chairman of the Japan Business Federation (Keidanren) as well. That reality, plus the fact that many of Toyoda’s older henchmen will still be senior executives in the company, suggests that Sato’s scope for making any major changes will be extremely limited.

At least for the time being, he won’t be his own man, and he might have been selected precisely because his is not interested in any major alteration of direction.

While Toyota Motor’s resources remain enormous at this juncture, Akio Toyoda’s enduring skepticism that electric vehicles (EVs) are the primary technology of the future may have put the company on the path to obsolescence. Tesla, rising Chinese automakers, and even some of the traditional Western automakers have embraced EV technology and are already poised to offer low-cost models to the market that Toyota may be hard-pressed to compete with.

Additionally, it’s not clear that the Japanese automaker has fully grasped the degree to which software will be integral to future transportation systems.

Certainly, Toyota’s first mass-market EV, the bZ4X stumbled out of the gates last year, subject to a recall and stop-sale order. While sales have now resumed, the firm is only planning to try to sell 10,000 units in the US market this year, and its global sales network very much prioritizes older hybrid technologies.

Specifically in the US market, Toyota is also grappling with the fact that under the Biden administration’s Inflation Reduction Act, buyers of EVs will not receive the US$7,500 federal tax credit if they purchase one of the Toyota models.

This bearish picture stands in sharp contrast to Tesla, which even now earns roughly seven times as much profit per vehicle as Toyota does.

Indeed, in last week’s earnings call for the final quarter of last year, Tesla CEO Elon Musk made clear that he doesn’t even consider Toyota to be a serious competitor in the EV market. Rather, he stated, “the Chinese market is the most competitive. They work the hardest and they work the smartest. So a lot of respect for the China car companies that we are competing against. And so, if I were to guess, there is probably some company out of China as is most likely to be second to Tesla.”

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Hyogo Bids to Become eVTOL Base

Akihabara News (Tokyo) — The Hyogo Prefectural Government is becoming increasingly proactive in its effort to emerge as a base for Japan’s eVTOL industry, in part to take advantage of the 2025 World Expo in neighboring Osaka Prefecture.

In its latest moves, the prefecture is scoping out potential vertiport sites, preparing subsidies and promotional events, and has signed a cooperation agreement with eVTOL-maker SkyDrive.

Hyogo Governor Motohiko Saito announced this week that his administration wants to identify about three potential vertiport sites, and he suggested that one of these might be the planned Phoenix Business Site, currently a landfill along the coastline of ​​Amagasaki city. This site has the advantage of being only about 2.5 kilometers from the manmade island of Yumeshima, where the 2025 Expo will be held.

After personally inspecting the area, Governor Saito declared that it has “great potential,” adding that “we would like to support test flights and the dissemination of information to the residents of the prefecture.”

The prefectural government is asking private companies to consider commercial operations of eVTOL, and is promising to be supportive of route surveys and test flights within the prefecture. In FY2023, the prefecture is offering up to ¥10 million (US$77,000) in subsidies for each project that aims to establish eVTOL-related businesses within the prefecture.

The prefecture is also planning to host a “Next-Generation Air Mobility Conference” (provisional name) to discuss ways to disseminate information and increase public awareness about the potential of eVTOLs. This will likely be held by March next year.

Overall, the prefectural government has budgeted a total of about ¥50 million (US$385,000) for eVTOL industry promotion in the April 2023-March 2024 period.

As an early step, the prefecture signed a cooperation agreement this week with Japan’s leading eVTOL-maker, SkyDrive. While it is not clear exactly what this partnership will entail, the announcement speaks of “development and social implementation of flying cars through the promotion of industrialization, achieving disaster prevention and mitigation, and building momentum for the 2025 Osaka-Kansai Expo.”

Last year, it should be recalled, the prefectural government also created the Hyogo Advanced Air Mobility (HAAM) lab, a virtual laboratory aiming to promote the eVTOL industry, foster social acceptance, support the efforts of student researchers, and to develop human resources necessary for the industry to prosper.

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SkyDrive Nests in South Carolina

Akihabara News (Tokyo) — Japan eVTOL-maker SkyDrive has decided to make South Carolina its base for entry into the US market, following up on an initial invitation it received last July.

Last year, the Japan External Trade Organization (JETRO) introduced SkyDrive executives to an office hub program based in Beaufort (along South Carolina’s Atlantic coastline between Charleston and Savannah, Georgia) called the Landing Pad. The Japanese firm was provided–for a period of ninety days–free office space and assistance from local agencies and businesses in order to accustom itself to local conditions.

While SkyDrive was not obligated to stay in Beaufort after the program ended, it was the objective of the local authorities to encourage the company to nest within the local area, and this goal has now been achieved.

SkyDrive CEO Tomohiro Fukuzawa explained that “the decision to make South Carolina our home base and our window into the US market was an easy one considering that it is a significant player in both the commercial and military aviation industries, and it is home to more than four hundred aerospace and aviation companies, including Boeing and Lockheed Martin. I sincerely believe that the vast number of resources available in South Carolina will provide SkyDrive with a substantial platform that enables us to achieve our goals.”

Harry M. Lightsey III, Secretary of Commerce at State of South Carolina Department of Commerce, celebrated the decision: “The future of advanced manufacturing, aerospace, and vehicle industries is here, and South Carolina is proud to welcome SkyDrive, an industry innovator, to our rapidly growing aerospace cluster. SkyDrive’s advanced electric propulsion technology and sustainable transportation implications are the perfect fit for South Carolina’s business roster and the state’s growing business development goals. South Carolina extends a warm welcome to SkyDrive and we look forward to supporting the company on its journey to continued growth and success.”

In addition to locating its US offices in South Carolina, SkyDrive has also announced that it is studying “practical use cases” for the SD-05 eVTOL in cooperation with two local airports. First is the Columbia Metropolitan Airport, which hosts more than 25 daily flights and is served by American Airlines, Delta Air Lines, and United Airlines, as well as major cargo firms. The other is the Greenville Downtown Airport, which is home to various flight schools and the Military History Center Museum, among other things.

James D. Stephens, Airport Director at Greenville Downtown Airport, commented: “Greenville Downtown Airport is partnered with SkyDrive to assist with the modeling of an Federal Aviation Administration-compliant advanced air mobility ecosystem that will serve our local region and state. We’ve done so because the airport needs to know what the infrastructure developmental needs will be in the future. We believe that the impact of advanced air mobility in Greenville will create a new form of transportation that eventually becomes part of the normal transportation processes within our community and around the world.”

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