Hitachi, Ltd.
NEC Corporation
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 offers a 0.18-micron process capability ahead of its competitors,
together with leading-edge DRAM and proprietary packaging technology. Moreover,
the company offers top-level design technology for high-speed, low power
consumption DRAMs, providing a range of value-added products that considerably
enhances Hitachi's competitive advantage.
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.
About Hitachi, Ltd.
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
About NEC Corporation
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 fields essential 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-
global.com
For further details, please contact:
Hitachi, Ltd. NEC Corporation
Yukiaki Ina Aston Bridgman
Public Relations, Corporate Communications Public Relations Division
Tel: 81-(0)3-3258-2055 Tel: 81-(0)3-3798-6511
E-mail: yina@cm.head.hitachi.co.jp E-mail: Aston_Bridgman@HO-PRD.ccgw.nec.co.jp
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