Dai Nippon Printing and NEC Electronics Sign Memorandum of Agreement for Cooperation of Photomask Business

Dai Nippon Printing Co., Ltd. ("DNP"), NEC Electronics Corporation ("NEC Electronics"), and NEC Electronics' wholly-owned subsidiary NEC Fabserve today announced that the three companies have agreed upon terms whereby DNP will purchase NEC Fabserve's photomask manufacturing and sales business. The transaction is expected to take place on June 1, 2007.

Through this agreement, DNP will expand and strengthen its photomask business by enhancing development and manufacturing capabilities and increasing production volumes, while simultaneously lowering overall production costs. By consigning photomask manufacturing to DNP, a trusted partner with expertise in the industry, NEC Electronics aims to improve its competitiveness in the semiconductor industry.

The process technologies used in semiconductor manufacturing have witnessed rapid development in recent years. As trends toward miniaturization show no sign of stopping at the 45-nanometer and 32-nanometer nodes, photomask development and successful volume production will be critical. However, the burden of development costs and capital investment is growing yearly, while the cost competitiveness for smaller production volumes is expected to drop sharply.

Given these conditions, the three companies believe that such an agreement was mutually beneficial, in light of their respective technical competencies.

DNP, NEC Electronics, and NEC Fabserve will continue to collaborate in developing and manufacturing photomask technology, to apply to their respective businesses.

About Dai Nippon Printing

Dai Nippon Printing (DNP) is one of the world's largest comprehensive printing companies and conducts a wide range of businesses, including publication printing, commercial printing, smart cards, business forms, networking and electronic components. The company is the top vendor of high-tech photomasks, produced by applying fundamental printing techniques and technologies. DNP accounts for about 22 percent of the world photomask market. For more information on DNP, please visit our website at www.dnp.co.jp/index_e.html.

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 handset, PC peripherals, automotive and digital consumer markets, and platform solutions for a wide range of customer applications. NEC Electronics Corporation has 25 subsidiaries worldwide including NEC Electronics America, Inc. (www.am.necel.com) and NEC Electronics (Europe) GmbH (www.eu.necel.com). For additional information about NEC Electronics worldwide, visit www.necel.com.

About NEC Fabserve

NEC Fabserve, Ltd is a wholly-owned subsidiary of NEC Electronics, providing manufacturing support, establishing new process lines and others. The company is located at Sagamihara city, and its sales amount is about 18 billion yen in fiscal year 2005.