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*****For immediate use March 15, 2005
NEC Announces New Management Structure
-Strengthening of market creation & business execution capabilities through NEC Group collaboration-
Tokyo, March 15, 2005 --- NEC Corporation today announced the reorganization of its structure effective as of April 1, 2005.
The new structure aims to "strengthen market creation capabilities" and "strengthen business execution capabilities" through NEC Group collaboration based on strengthening of collaboration between sales staff and system engineers ("SEs,") consolidating software development competencies, and strengthening of business promotion functions cross-company.
On the first of June 2005, NEC plans to make NEC Soft, Ltd. and NEC System Technologies, Ltd. its wholly-owned subsidiaries (*Note 1.) and to strengthen its system integration ("SI") and software development competencies. Preceding this, during the reorganization of NEC's structure at this time, "NES Solutions Group Business Unit," originating from NEC Soft, Ltd. and other software related affiliated companies that focus on SI business, and "NE Software Development Group Business Unit," originating from NEC System Technologies, Ltd. and other software related affiliated companies that focus on software development, will be newly established to create a structure where software related companies can cooperate on the same level with each business unit within NEC.
Simultaneously, the "Industrial Solutions Business Unit" will be established as a unit integrating the sales and SI related business units, and the "Embedded Software Business Promotion Division" will be newly established to promote embedded software business group-wide.
The positioning of the "NES Solutions Group Business Unit" and the "Industrial Solutions Business Unit" will enable collaboration between sales staff and SEs, and along with expanding the business domain within the market, every effort will be made by the Group to tackle "production innovation activities in SI."
In addition, amid the increasing importance of software in network business areas such as internet protocol ("IP") network infrastructure, mobile infrastructure, and mobile phone terminals etc., the "NE Software Development Group Business Unit" will further strengthen software development such as for middleware and security etc., in addition to expanding the human resources and know-how that NEC has cultivated in the IT business area to software development for networks.
At the same time, the entire NEC Group, including NEC Electronics Corporation, will tackle the embedded software business, where fast market development is anticipated, while collaborating with the "Embedded Solutions Business Promotion Division."
In addition to the reorganization of the above business divisions, in order to strengthen technological competitive power in the integrated IT/network business domain, along with the new establishment of an "Intellectual Asset R&D Unit," company-wide committees based on the themes of "next-generation optical/IT networks" and "convergence of telecommunication and broadcasting/fixed-mobile convergence" etc. will be formed. Simultaneously, along with advancing the personnel flow between the IT and network businesses at top management level, an officer will be appointed to take charge of business integration/promotion of the growth strategy.
Furthermore, in order to accelerate the growth strategy for global business, an "International Business Promotion Unit" will be newly established to strengthen overseas business promotion functions company-wide.
By this reorganization, NEC will ensure the implementation of its growth strategy after next year and strive to improve its earning power through promoting the strengthening of its market creation capabilities and business execution capabilities company-wide.
An outline of this reorganization, and a list of the corporate officers in charge of the business units, is as below.
| (I) |
Outline of Reorganization |
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| (1) |
Strengthening of SI services business and software development |
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| 1. |
Strengthening of SI services business structure
In order to strengthen market creation capabilities and sales proposal power by responding to customers through unified sales staff and SEs, and realize an improvement in the level of customer satisfaction, the current "Industrial Solutions Business Unit" and "Systems Services Business Unit" will be combined to form a reorganized "Industrial Solutions Business Unit." |
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| In addition, an "NES Solutions Group Business Unit" will be newly formed as the business unit in charge of providing system development and solutions for mid-sized/local enterprises through collaboration with the "Industrial Solutions Business Unit" and the "Domestic Sales Business Unit" etc. This unit will be structured from NEC Soft (omitting the software development divisions,) some of NEC's software related affiliated companies (* including NEC Software Hokkaido, Ltd., NEC Software Tohoku, Ltd., NEC Software Hokuriku, Ltd., NEC Software Chubu, Ltd., NEC Software Kyushu, Ltd.) and the SI divisions of NEC System Technologies. |
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| This business unit, along with establishing a new business role structure for the NEC Group, will tackle SI production innovation group-wide, aiming to enhance SI productivity through the promotion of information sharing between all of the groups representing the SI services business and collaboration measures. |
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| 2. |
Strengthening of software development capabilities
The software development resources of the NEC Group will be combined, and along with the strengthening of software development capabilities for not only the IT domain, but also for the network domain including semiconductors, the "NE Software Development Group Business Unit" will be established as a unit mainly in charge of software development for the entire NEC Group. This unit will be formed of NEC System Technologies (omitting the SI divisions,) NEC Communications Systems Ltd., and the software divisions of NEC Soft. Through the formation of this unit, NEC will aim to expand and strengthen its platform software products in the IT domain such as those for platform optimization and security, and ubiquitous network applications etc. Furthermore, along with the expansion of IP business, the importance of software in the network business is escalating quickly from platform networks to service platforms such as IP telephony, and in response to these factors NEC will integrate its software development capabilities for open domain middleware cultivated in the IT business domain and communication know-how and reliable technologies in the NW business domain to strengthen its network business. Moreover, all of the software companies will unify their strengths to establish a structure to enable the NEC Group as one to respond to a new software market including the embedded software domain etc. |
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| In particular, NEC will establish an "Embedded Solutions Business Promotion Division" in order to advance the strengthening of its business in the embedded software business as the NEC Group, as fast market expansion is anticipated in this domain in in-vehicle terminals, mobile phones, and information electronics etc. This division, along with developing and promoting a collaboration strategy for embedded solutions business to spread to every company in the NEC Group, aims to expand business utilizing the synergy among each business unit, NEC Electronics Corporation and each NEC Group company. |
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| (2) |
Growth and expansion of integrated IT/NW business through strengthening of competitive power |
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| NEC will accelerate even faster integrated IT/network business through collaboration among business units, and in order to realize business growth for the entire company, promote personnel exchange between IT and networks at top management level and simultaneously assign an officer to take charge of business integration/promotion of the growth strategy. Under the concerned officer, company-wide committees will be organized focused on "next-generation optical/IP networks" and "convergence of telecommunications and broadcasting/fixed-mobile convergence" and "development of new products through integration of IT/networks" etc. And as well as considering the growth strategy/technology integration strategy of the integrated IT/network business, this officer will examine the mid-term direction of these themes on a company-wide basis. |
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| Moreover, in order to support business growth through integration of IT/networks from a technological perspective, the R&D Unit and the Intellectual Asset Operations Unit will be combined to establish the "Intellectual Asset R&D Unit." Through this, along with the reformation of the innovation process for activities from intellectual asset creation through R&D to applications including sales, NEC will strengthen its intellectual asset earning power and promote integrated strengthening of the Group's technological competitive power. |
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| (3) |
Acceleration of global growth strategy |
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| Establishment of an "International Business Promotion Unit" aimed at strengthening promotion of overseas business cross-company and support of overseas subsidiaries. By establishment of this unit, NEC will promote expansion of its solutions business constituted of overseas subsidiaries, as well as strengthen its strategy policy function by individual region and country on a cross-company basis etc. |
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| (II) |
Corporate Officers in Charge of Business Units |
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| The corporate officers in charge of the 12 business units, effective as of April 1, 2005, will be appointed as follows. |
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Corporate Officers in Charge of Business Units
| Domestic Sales Business Unit |
Executive Vice President and Member of the Board |
Kazumasa Fujie |
| Industrial Solutions Business Unit |
Senior Vice President and Member of the Board |
Iwao Fuchigami |
| NES Solutions Group Business Unit |
Executive Vice President |
Kenji Ikehara |
| Broadband Solutions Business Unit |
Senior Vice President and Member of the Board |
Saburo Takizawa |
| Social Infrastructure Solutions Business Unit |
Senior Vice President |
Masatoshi Aizawa |
| Mission Critical Systems Business Unit |
Senior Vice President |
Masatoshi Aizawa |
| Software Business Unit |
Senior Vice President |
Koichi Ikumi |
| NE Software Development Group Business Unit |
Executive Vice President |
Toshihiko Takahashi |
| Computers Platform Business Unit |
Senior Vice President |
Masahiko Yamamoto |
| Network Platform Business Unit |
Senior Vice President |
Akihito Ohtake |
| Mobile Business Unit |
Senior Vice President and Member of the Board |
Tsutomu Nakamura |
| Personal Solutions Business Unit |
Executive Vice President |
Toru Katayama |
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*Please see attachments for details concerning the organization chart and personnel above the rank of Executive General Manager.
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 4,906 billion yen (approx. $47 billion) in the fiscal year ended March 2004. For additional information, please visit the NEC home page at: http://www.nec.com.
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Notes:
| *Note1: |
In April 2005, extraordinary shareholder meetings will be held at both NEC System Technologies, Ltd., and NEC Soft, Ltd., and after both companies resolve their agreement at these meetings to a tender offer bid by NEC Corporation for the shares of both companies in order to make both companies its wholly-owned subsidiaries, it is planned that both will become wholly-owned subsidiaries of NEC Corporation on June 1, 2005. |
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