*****For immediate use November 19th, 2001
NEC to strengthen its Broadband and Mobile Communications Focussed Semiconductor Business
-Reinforcing NEC's (R&D&P System) from Research and Development to Mass Production-
TOKYO November 19th, 2001 - NEC Corporation (NEC) (NASDAQ: NIPNY) (FTSE: 6701q.l) (TSE: 6701) today announced its plan to strengthen and consolidate its broadband and mobile communications focussed semiconductor business. The business plan includes a shift of part of the employee base and equipment from NEC's Photonic and Wireless Research Laboratories to NEC Kansai Ltd. (NEC Kansai), where production lines are concentrated on semiconductors for optical networks and microwave devices. To further reinforce the operations, NEC will also construct a research and development pilot line at the Kansai plant.
In the semiconductor field for broadband and mobile communications, new applications and technologies are continuing to advance rapidly. For this business, in order to achieve high growth, NEC has focussed on two important areas, the first, to install cutting edge technology in its products as the earliest possible stage, and secondly, to quickly transfer feedback from the market into the research and development process. Accordingly, in 1991, NEC established, at its NEC Kansai facility, a research center and business operations focussed research and development division, pioneering a system (R&D&P system) promoting close cooperation between research and development and the production lines, which in turn, resulted in growth exceeding that of the market.
In recent years, accompanying the rapid spread of the Internet, telecommunication traffic volumes have increased dramatically and the quick expansion of mobile phones and wireless communications has lead to a strong concentration on the fields of broadband communication specific semiconductors, which center on optical network semiconductors, and on core microwave semiconductor technology used for mobile telecommunications. Being able to respond to the accelerating technology turnover has become the prime task for NEC. In line with this, to reinforce its R&D&P system aimed to quickly transfer new research results to the production lines, NEC will move its fundamental research function, currently located in Tsukuba city, Ibaraki prefecture to NEC Kansai, and rearrange its expanding Photonic and Wireless Device Research Laboratories and its technology and product development resources of NEC Compound Semiconductor Devices, Ltd. (NCSD), already located at NEC Kansai.
To accommodate for the transfer of personnel and equipment as well as reorganization of the research and development functions at NEC Laboratories and NCSD, a new building will be constructed at the NEC Kansai facility beginning operation, in stages, from April 2002. Total capital investment for the development has been set at 3 billion Yen.
NEC is making every effort to maximize corporate value of the entire NEC group by advancing its business activities through focus and reorganization under its own "Global Number One" business strategies focussed on broadband and mobile Internet applications. For network devices, optical network and microwave semiconductors are the key devices supporting the expansion and growth of the broadband mobile communications market. The market, with its quick technology turnover is one of extremely fierce competition between specialized manufactures. In this environment, to stay at the front, NEC has advanced its growth strategy through the spinning off of NCSD on October 1, this year, as well as reinforcing its R&D&P system to further increase its research and development power in the areas of broadband and mobile.
For further information, please refer to the attached.
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 more than 150,000 people worldwide and saw net sales of 5,409 billion Yen (approx. US$43 billion) in fiscal year 2000-2001. For further information, please visit the NEC home page at: http://www.nec.com
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