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*****For immediate use November 5, 2001

NEC Announces Manufacturing Partnership Plan for Telecom Infrastructure Systems

TOKYO, November 5, 2001 - NEC Corporation (NEC) (NASDAQ: NIPNY) (FTSE: 6701q.l) today announced its intention to outsource the manufacturing functions at NEC Miyagi, Ltd. (NEC Miyagi) and NEC Yamanashi, Ltd.(NEC Yamanashi); both of which are engaged in the development and manufacturing of telecom infrastructure systems, to an Electronics Manufacturing Service (EMS) provider. NEC is currently negotiating with several EMS companies and is expected to reach a definitive agreement by the end of the year with an anticipated closing by March, 2002.

NEC Miyagi and NEC Yamanashi are developing and manufacturing advanced optical transmission systems including Wavelength Division Multiplexing System (WDM) and SONET/SDH as well as access network systems such as xDSL (DSLAM).

The main points of the transfer are as follows.

  • NEC will create a new company that will combine the manufacturing assets and processes of NEC Miyagi and NEC Yamanashi. This new company will include approximately 1200 people (800 from NEC Miyagi and 400 from NEC Yamanashi) that are currently employed at the two facilities. The new company will be transferred to EMS.
  • NEC expects to enter into a multi-year agreement with the EMS company to supply manufacturing services to NEC for the products transferred under the agreement.

The design and development functions currently performed by NEC Miyagi will not be transferred to the EMS company and NEC Miyagi will continue as a developer of optical transmission systems. The development and manufacturing operation of NEC Yamanashi "Otsuki Plant", that is involved in manufacturing optical devices and optical submarine cable systems, also will not be transferred to the EMS company.

Through the alliance with the EMS company, NEC intends to improve the price competitiveness of its products, production lead-time and flexibility to better handle fluctuation of market demands, by leveraging NEC's leading-edge production techniques and technological capabilities with the EMS company's global manufacturing capabilities, purchasing power and product introduction expertise. The alliance will enable the EMS company to obtain an extensive base for telecom infrastructure systems backed by NEC's technologies and prominent human resources.

For a Profile of NEC Miyagi and NEC Yamanashi, please see the attached sheet


About NEC Corporation

NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) is a leading provider of Internet solutions, dedicated to meeting the specialized needs of its customers in the key computer, network and electron device fields through its three market-focused in-house companies: NEC Solutions, NEC Networks and NEC Electron Devices. NEC Corporation, with its in-house companies, employs approximately 150,000 people worldwide and saw net sales of 5,409 billion Yen (approx. US$43 billion) in fiscal year 2000-2001.
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NEC Corporation
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