*****For immediate use July 30, 2003
NEC, Solectron to Collaborate in Total Supply Chain Management of 3G Mobile Terminals
- Companies to speed delivery of products to end users as
NEC expands mobile terminal business -
TOKYO and MILPITAS, Calif. -- NEC Corporation (NEC), a leading provider of Internet, broadband network and mobile Internet solutions, and Solectron Corporation (NYSE: SLR), a leading provider of electronics manufacturing and supply-chain services, today announced an agreement in principle for Solectron to provide manufacturing and after-sales services for NEC's advanced Internet-enabled handsets.
In an expansion of the relationship between the two companies, Solectron would be the outsourced manufacturer of NEC's Third-Generation (3G) mobile terminal products, or handsets, for markets outside of Japan. NEC, which currently produces these products in Japan, plans to gradually transfer production to Solectron's facility in Suzhou, China, after initial pilot production of each new product in Japan.
Under this agreement, NEC's mobile terminal manufacturing capacity outside of Japan would rise to more than 1 million units per month.
Solectron recently began producing the first product covered by this agreement, an NEC 3G handset for wireless service provider Hutchison 3G. The handset's features include video calling, video and photo messaging, video downloading, games and wire-free dial-up networking.
In addition, Solectron recently started providing pan-European repair services for NEC 3G products. The two companies said they would negotiate an expansion of their relationship to include mobile terminal customizations.
"Through this agreement with Solectron, NEC expects to reinforce the total supply chain of NEC's mobile terminals outside Japan," said Susumu Otani, associate senior vice president, head of NEC's mobile terminals business unit. "At NEC, we are using our know-how, competence and leading position in the Japanese 3G and mobile Internet market to rapidly expand our mobile terminal business outside of Japan. To achieve this, it is an important strategy to further strengthen our supply chain with effective manufacturing systems, customization and full maintenance support for end users around the world."
NEC supplies advanced mobile Internet terminals worldwide, including the world's first 3G terminals for NTT DoCoMo, J-PHONE and Hutchison 3G's operations, and 2.5G terminals for KPN group (the Netherlands, Belgium and Germany), Bouygues Telecom in France, Telefonica Moviles in Spain, KG Telecom in Taiwan, Telecom Italia Mobile, AT&T Wireless in the United States and for the China market (China Mobile's MMS service). NEC's mobile handsets are known for their prominent technologies, including large color screens, built-in cameras and other functions that make them ideal for mobile Internet use.
"Implementation of this agreement will strengthen our relationship with NEC, one of Solectron's major global customers, as well as expand our consumer-products business," said Chester Lin, executive vice president and president, Solectron Asia/Pacific. "We look forward to utilizing our range of services to help NEC streamline its supply chain and meet the needs of its 3G customers and end users."
About NEC Corporation
NEC is one of the world's leading providers of Internet, broadband network and enterprise business solutions dedicated to meeting the specialized needs of its diverse and global base of customers. Ranked as one of the world's top patent-producing companies, NEC delivers tailored solutions in the key fields of computer, networking and electron devices, by integrating its technical strengths in IT and Networks, and by providing advanced semiconductor solutions through NEC Electronics Corporation. The NEC Group employs more than 140,000 people worldwide and had net sales of approximately $40 billion in the fiscal year ended March 2003.
More about NEC at: www.nec.com.
NEC is a total solution provider for 3G and the mobile Internet. NEC has been involved in every first-stage rollout of 3G systems worldwide. NEC is also responsible for developing the first 3G handsets for use on the world's first 3G network. NEC has competence in the mobile Internet area with its mobile infrastructure system, mobile application platform and its impressive portfolio of content.
Solectron (www.solectron.com) provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warranty and end-of-life support. The company is based in Milpitas, Calif., and had sales of $12.3 billion in fiscal 2002.
This news release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, Solectron's anticipated future business with NEC Corporation, including the consummation of the agreement in principle announced today. The news release is based on current information and expectations that are subject to a number of risks and uncertainties. These risks and uncertainties include the companies finalizing terms and executing a final agreement on all aspects of the new business, actual end-market demand for the products involved, and the degree of success in achieving the supply-chain efficiencies contemplated by the relationship. Other potential risks that could cause actual events to differ materially are included in filings with the Securities and Exchange Commission, including Forms 8-K, 10-K, 10-Q, S-3, S-4 and S-8 for Solectron Corporation. Solectron disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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