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*****For immediate use July 4, 2005

NEC to Establish "MONOZUKURI Innovation Unit" to Promote Strengthening of NEC Group's Value Chain
- Expansion of production innovation to entire Group & promotion of added value creation -




Tokyo, July 4, 2005 --- NEC Corporation today announced that it intends to strengthen productiveness across the entire value chain of the NEC Group from planning, development, and design of products, to production, and sales and maintenance. Starting with the expansion of self-manufactured parts and self-made production equipment, NEC will establish a "MONOZUKURI Innovation Unit" on July 15, 2005, composed of 150 employees, as an organization to promote strengthening of profitability and competitiveness of the entire NEC Group. ("Monozukuri" is a Japanese word signifying product development and the production and delivery process).

In December 2000, the NEC Group introduced company-wide the "Toyota Production System" with the goal of improving efficiency of its entire supply chain, and has since continued to promote improvement of productivity and product quality. In addition, regarding "internal efforts toward creation of added value," considered to be the next phase of production innovation, the NEC Group is already demonstrating results such as in self-manufacturing of parts and self-made production equipment through Group production companies such as NEC Access Technica, Ltd., NEC Wireless Networks, Ltd., and NEC Saitama, Ltd.

Along with expanding production innovation philosophy to the entire value chain, the "MONOZUKURI Innovation Unit" will promote the strengthening of profitability and competitiveness of the entire NEC Group by supporting internal efforts toward creation of added value by NEC's business Units and Group production companies. Moreover, this unit will also expand the know-how and output it acquires in process innovation and self-manufacturing through its activities to the software/SI services business area.

This unit will integrate the functions of the Process Transformation Unit, the Jisso and Production Technologies Research Laboratories of the Intellectual Asset R&D Unit, and NEC Production Systems, Ltd., which carry out functions such as development process innovation, production innovation, cutting edge production engineering/production equipment development, and skill strengthening support related to hardware.

The main characteristics of the new unit are as follows:

(1) Expansion of internal efforts for creation of added value
The new unit will utilize the margin of personnel, space, and production equipment born from production innovation and process innovation activities to expand self-manufacturing of important parts and self-made production equipment. Moreover, it will promote the improvement of production technology skills and personnel cultivation support within the NEC Group. In addition, it will accelerate the utilization of key components, the source of competitiveness of the NEC Group. Through this it will realize expansion of internal efforts undertaken toward creation of added value, optimized allocation of Group resources, and quality improvement.
 
(2) Promotion of cutting edge production engineering/production equipment development and strengthening of production competitiveness
It will incorporate production innovation philosophy, and promote development of production equipment that realize efficient production and elimination of waste. Furthermore, it will promote the implementation of cutting edge engineering and production know-how into production equipment, and strengthen NEC Group production competitiveness.
 
(3) Expand production innovation to the entire value chain
The unit will promote expansion of production innovation, mainly carried out on the production site, to the entire value chain, from the planning, development, and design of products, to logistics, sales, and maintenance. Through this it will; establish agile development and production processes that promptly and flexibly responds to market needs, strengthen measures for improvements in quality and cost competitiveness from the early stage of development and design, strengthen customer responsiveness for sales and maintenance, and increase efficiency in indirect services, realizing total process innovation.

* Please refer to the separate attachments for the new organization charts of NEC Corporation.

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 4,855 billion yen (approx. $45.4 billion) in the fiscal year ended March 2005.
For additional information, please visit the NEC home page at: http://www.nec.com
* Newsroom: http://www.nec.co.jp/press/en/index.html

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NEC Press Contacts:
In Japan
Diane Foley
NEC Corporation
d-foley@ax.jp.nec.com
+81-3-3798-6511

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