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*****For immediate use March 16, 2004

NEC Announces New Management Structure for Fiscal
Year Ending March 31, 2005

- Implementation of growth strategy by strengthening market response -




Tokyo, March 16, 2004 --- NEC Corporation today announced the reorganization of its structure effective as of April 1, 2004.
As of April 1, 2003 NEC shifted from an in-house company system to a flat management structure characterized by business lines, undertaking "open and flat management". As a result of NEC's efforts over the year, the initially set goals to 'secure stable profit' and 'improve the financial structure' are near accomplishment, and NEC has laid out a 'mid-term growth strategy' centered on IT/network integration, under which steady business operation is being carried out toward new growth creation.
Along with the strengthening of the management structure, NEC intends to enhance its market responsiveness in order to respond better to a harshly competitive business environment where customers' needs are changing continuously. In particular, NEC will strengthen its organization structure to enhance the delivery of various solutions leveraged on its competence in the networking area. NEC believes that this will boost the implementation of its growth strategy in the next fiscal year, and ultimately lead to further improvement of its profitability.

(I) New Organization Outline
  1. Improving Market Response to the IT/Network Market
     
    In order to improve market responsiveness under the flat management organization structure, the 9 current 'business lines' will be reorganized, and renamed, to 11 'business units'.
 
    1. Establishment of a New 'Broadband Solutions Business Unit'
Currently, the broadband environment is developing at a rapid speed in Japan. Amidst this environment, NEC will apply its strength in the Systems Integration (SI) business and realize its growth strategy by actively pursuing and achieving new business opportunities in broadband office solutions, e-government solutions, and network outsourcing solutions. In addition, NEC will consolidate divisions engaged in activities associated with broadband solutions to form the new 'Broadband Solutions Business Unit'.
       
    2. Establishment of a New 'Systems Services Business Unit', and a 'Mission Critical Systems Business Unit'
NEC, in order to enhance integration of its know-how in the IT and network areas, will promote on a company-wide basis the integration of a systems development map, as well as effective application of system development resources, and sharing of development process know-how. In addition, in order to further strengthen its competence to build and operate mission critical systems including networking infrastructure and systems, it will consolidate and reorganize relating divisions to establish two new business units; the 'Systems Services Business Unit', and the 'Mission Critical Systems Business Unit'.
 
    3. Establishment of a New 'Network Platform Business Unit'
In order to further strengthen NEC's competence in the network platforms area, NEC will establish a new 'Network Platform Business Unit', and promote its next-generation network technology development. The new business unit will pursue close collaboration with the Computers Platform Business Unit to accelerate development of products that maximize NEC's strength in both IT and networks.
 
  2. Strengthening of the Company-Wide Marketing Function

In order to realize NEC's mid-term strategy, NEC will explore new growth opportunities from the company-wide standpoint without staying attached to traditional business models. A new 'Marketing Unit' will be established to plan and promote marketing measures for the entire company, including external alliance opportunities, in order to exploit and tap into the market.
The 'Marketing Unit', will consist of a Marketing Planning Division, a Solutions Marketing Operations Unit, and an Advertising Division, and will enhance the company-wide marketing function.
Simultaneously, a 'Marketing Strategy Committee' will be established. The committee chaired by President Akinobu Kanasugi will promote business development, exploitation of new markets that closely tie in with NEC's growth strategy, and the development of IT/network solutions that embrace customer, market, competitor and technology trends.
 
  3. Measures for Cross-Company Issues & Strengthening of Collaboration between Business Units

'Company-Wide Committees', headed directly by President Akinobu Kanasugi, will be established in order to deliberate on issues of significant importance that apply cross-company. In order to realize NEC's growth strategy by strengthening business execution capability towards enhanced performance, it is vital to enhance collaboration among business units to resolve and promote cross-company issues. Consequently, a committee will be established for each of the following themes; marketing strategy, technology innovation, process transformation, software business strategy, global business development, and so on. The Company-Wide Committees will be positioned as part of the management innovation activities, and through cross-functional activities will strengthen business performance to ensure surpassing of competitors.
In relation to this, new divisions will be established to take responsibility for promoting measures dealing with the above cross-company issues.
 
    1. Establishment of a new 'Process Transformation Unit'
Extending on the current production innovation and cost reduction activities, NEC intends to further strengthen its business execution capability toward enhanced performance. From this standpoint, NEC will newly establish a Process Transformation Unit, which will promote innovation, including transformation of process as required, and efficiency within the overall business process, including development of products/solutions. This unit will be positioned at the operations unit level within the organization. The following divisions will be positioned under this unit; Corporate IT Division, Information Systems Division, Product Development Innovation Division, Production & SCM Innovation Division, and Business Process Innovation Division.
 
    2. Establishment of a new 'Software Business Planning Office'
A 'Software Business Planning Office' will be newly established in order to plan and promote measures to enhance NEC Group-wide development capabilities and structure, as well as strengthening of business in the software area, which is one of NEC's areas of competence. NEC expects that the new structure will enhance the application of its know-how and resources in the software area, to better correspond to the increasing market needs for embedded software as well as software development capabilities required in the networking and semiconductor areas.

* Please see attachments 1 and 2 (organization charts) for details concerning the new organization, and attachment 3 for details on the Company-Wide Committees.

(II) Corporate Officers
  The corporate officers in charge of the eleven business units, effective as of April 1, 2004, will be appointed as follows.
   
  Corporate Officers in Charge of Business Units
 
1. Domestic Sales Business Unit Senior Vice President and
Member of the Board
Kazumasa Fujie
2. Industrial Solutions Business Unit Executive Vice President Hiroshi Takakuta
3. Broadband Solutions Business Unit Senior Vice President Saburo Takizawa
4. Social Infrastructure Solutions Business Unit Senior Vice President Katsutoshi Nakada
5. Systems Services Business Unit Senior Vice President Iwao Fuchigami
6. Mission Critical Systems Business Unit Senior Vice President Masatoshi Aizawa
7. Software Business Unit Senior Vice President Koichi Ikumi
8. Computers Platform Business Unit Senior Vice President Tadao Kondo
9. Network Platform Business Unit Senior Vice President Masahiko Yamamoto
10. Mobile Business Unit Senior Vice President and
Member of the Board
Tsutomu Nakamura
11. Personal Solutions Business Unit Executive Vice President Kenji Yoshiyama


About NEC Corporation
NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) 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. For additional information, please visit the NEC home page at: http://www.nec.com.

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