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NEC Acquires Beijing Design Company, Beijing Hua Hong NEC IC Design Co., Ltd.
TOKYO, KAWASAKI, Japan, December 18, 2003 -
NEC Corporation and NEC Electronics Corporation announced today that NEC has completed the agreed purchase of shares of Beijing Hua Hong NEC IC Design Co., Ltd. (BHNEC) in Beijing, China from the co-investor, Beijing Hua Hong Integrated Design Co., Ltd. As a result of the purchase, BHNEC has been turned into a wholly owned subsidiary of NEC and the company name has been changed to NEC IC Design Beijing Co., Ltd. (BJNEC).
Although BJNEC will continue current operations, the company also aims to strengthen relationships with NEC group companies and actively expand semiconductor business in China. Additionally, based on a prior agreement with NEC Electronics that NEC Electronics will take over all the shares of BJNEC from NEC, BJNEC is slated to become a wholly owned subsidiary of NEC Electronics in the future.
BHNEC was established in 1998 with 40% invested by Beijing Hua Hong Integrated Circuits Design Co., Ltd. and 60% by the NEC group, including initially 41% by NEC, 10% by NEC China Co. Ltd , and 9% by Shougang NEC Electronics Co., Ltd., as part of the Chinese government's 9th five-year plan for the semiconductor industry.
With fabrication consigned to Shanghai Hua Hong NEC Electronics Co., Ltd., BHNEC was from the start a leading fabless company, designing and developing microcontrollers and ASICs (Application Specific ICs) for consumer products such as digital home equipment and cellular phones. Also focusing on design technologies, BHNEC acquired level 3 on the Capability Maturity Model (CMM) in June 2002-indicating their expertise in software development processes-and also acquired ISO9001 certification in April 2003.
An emphasis on fostering human resources has seen BHNEC grow to employing 180 staff as of November 2003, with expected sales of 1 billion yen for the calendar year. 90% of sales are export driven and contribute to the development of the Chinese semiconductor industry.
NEC has been developing communications, computer, and electronics device business in China since 1972, and decided to acquire BHNEC to bring the company closer to its Chinese customers and expand its semiconductor business in the high-potential Chinese market.
"We believe the tightened relationship between NEC Electronics and BJNEC will leverage our strengths in Chinese market. At BJNEC, we focus more on domestic Chinese customers and target to increase the ratio of sales in China from current 10 percent to 50 percent in the near future, and 90 percent in the long run," said Hirokazu Hashimoto, Executive Vice President of NEC Electronics Corporation. "We will enhance the local sales force first, and would like to expand the sales of the company to 5 billion yen in 2005."
Please refer to the attachment below for an overview of BJNEC.
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.
About NEC Electronics Corporation
NEC Electronics Corporation (TSE: 6723) specializes in semiconductor products encompassing advanced technology solutions for the high-end computing and broadband networking markets, system solutions for the mobile handsets, PC peripherals, automotive and digital consumer markets, and platform solutions for a wide range of customer applications. NEC Electronics Corporation has 24 subsidiaries worldwide including NEC Electronics America, Inc. (www.am.necel.com) and NEC Electronics (Europe) GmbH (www.ee.nec.de).
For additional information about NEC Electronics worldwide, visit www.necel.com.
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