Nec & Hitachi Agree To Extensive DRAM Cooperation
Jun 23, 1999 00:00 AM
NEC Corporation (NEC) (NASDAQ: NIPNY) and Hitachi, Ltd. (Hitachi) (NYSE: HIT) today announced that the companies have agreed to establish wide-ranging cooperation in their DRAM businesses. The companies are to consider establishing a joint-venture company responsible for DRAM development and design, and unification of their DRAM products under a single brand manufactured using the production resources at both companies.
Preparations are underway with a view to establishing the joint-venture development and design company at the end of this year, while a unification of product brands and other items is expected upon reaching a basic, concrete agreement.
There are an increasing number of large-scale tie-ups between semiconductor companies, particularly between those in the DRAM area. There is a rapid rise in the number of strategic alliances and mergers as the expenses for development of leading-edge technologies and products present a series of issues for companies facing extremely stiff worldwide competition.
Through the joint-venture DRAM development and design company, NEC and Hitachi believe their top-class technology will guarantee them a leading position in the industry, that will provide significant improvements in profitability for the semiconductor businesses at both companies thanks to economies of scale and shared expenses
NEC is making every effort to improve profitability through a business strategy that levers its advanced high density, high-speed memory technologies such as its Virtual Channel Memory architecture that the company is proposing as a new standard to the industry because of its superior performance for graphics-intensive applications.
The memory market, however, is seeing an increasing concentration of North American, European and Asian manufacturers, making it vital to achieve economies of scale and enhanced technological development, while strengthening cost competitiveness, in order to thrive in the DRAM business.
NEC believes that through its alliance with Hitachi and its considerable leading-edge technology, the concentration of resources in the DRAM field will result in world-class technological capabilities and a strengthened presence in global markets backed by enhanced cost competitiveness.
Hitachi's Semiconductor Group has established a slimmer management structure through business restructuring and management innovations. The Group is now working at creating a more responsive management by using strategic alliances and external production resources. Through its alliance with NEC, Hitachi plans to further improve the speed of its response to market needs.
By levering the competitive strengths of both companies, NEC and Hitachi aim to make every effort to be the world's foremost supplier of DRAM devices.
Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 1998 (ended March 31, 1999) consolidated sales of 7,977 billion yen ($65.9 billion*). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi's Web site at http://www.hitachi.co.jp.
*At an exchange rate of 121 yen to the dollar.
NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) pioneered the concept of C&C, the integration of Computers and Communications, and is the only company in the world to be counted among top ranking corporations spanning the wide range of fieldsessential for this vision of multimedia: computers, communications and electron devices. Employing in excess of 150,000 people around the world, NEC saw net sales in fiscal year 1998-99 amount to 4,759 billion yen (approx. US$40 billion). For further information, visit the NEC home page at: http://www.nec.com.
Gerard F. Corbett
Hitachi America, Ltd.
Corp. Communications Group
Fax: (650) 244-7920
NEC USA, Inc. - New York
Corporate Communications Division
NEC Corporation - Tokyo
Public Relations Division
Public Relations, Corporate Communications
Hitachi America, Ltd.
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