NEC Essay ⋆ Business Essay Examples ⋆ EssayEmpire

NEC, formally known in Japan as Nippon Denki Kabushiki Gaisha, is a multinational company, head achieve that goal it provides a variety of electronics products and services to include personal computers and peripherals, computer storage, networking equipment and services, and semiconductors. It also manufactures and sells consumer goods such as refrigerators, air conditioners, microwave ovens, and washers. In the year ending March 2008, it announced that its revenues totaled $46.172 billion and its profits totaled $227 million. According to iSuppli Applied Marketing Intelligence, NEC Semiconductors ranked number 13 in the world with 2.1 percent world market share.

The company is organized into three major sections: IT Solutions, Network Solutions, and Electronic Devices. IT Solutions provides both computer hardware and software as well as services. Network Solutions designs and implements network systems to include mobile and wireless systems. Electronic Devices provides semiconductors, displays, and other electronic equipment.

NEC (an abbreviation for Nippon Electric Company) is a very old company. It came into existence in 1898 and was initially a joint partnership with the American Western Electric Company. NEC was the first Japanese company formed with foreign capital; it made and maintained telephone equipment, first phones and switches, and then switchboards. While NEC provided equipment for domestic consumption, it also made equipment for export, starting in 1904, sending equipment to China and then to Korea. The company did not expand in a smooth fashion but rather in fits and starts in direct response to the Japanese government’s timetable for providing telephone service to the islands. When the government decided upon expansion, NEC expanded as well. Whenever the government called a temporary halt to installing services, NEC had to pause as well. It was during these pauses that NEC began the practice of importing electric appliances for sale in Japan.

Starting in the mid-1920s, NEC began developing a radio communications business, first broadcasting with imported U.S. equipment in 1925. NEC expanded into developing radio transmitters that were sold in both Japan and China. NEC also developed a method for transmitting photographs by radio, first accomplishing this in 1928.

As was the case with many industries, NEC was taken over by the government during World War II and was run directly by the Army. The NEC factories were severely damaged during U.S. bombing raids and were not able to reopen until 1946. As the 1950s opened, NEC began developments in several areas commencing with research, development, and manufacture of transistors. The company also made radio broadcasting equipment for export, began developing computers (a transistorized model appeared in 1959), and underwater communications cable.

NEC appeared in the United States and Switzerland. In 1978 the first NEC factory in the United States opened. In the 1980s, NEC entered semiconductor chip production, personal computers (entering this market in 1982) while continuing to manufacture telephone systems, and also made consumer goods such as videocassette recorders, televisions, and printers. In this period, NEC was also heavily engaged in the design, development, and manufacture of supercomputers. It was this last area that not only brought a great deal of favorable attention, but also unfavorable notice, namely from the U.S. government.

In 1997 NEC was cited by the U.S. Commerce Department for attempting to dump supercomputers on the U.S. market. The dumping was to be accomplished by underbidding U.S. supercomputer manufacturer Cray on a contract for the American National Center for Atmospheric Research. NEC had bid to provide four 32-processor SX-4 supercomputers in May 1996 for $35 million. Finally, in February 2001, NEC announced a distributorship arrangement with Cray for NEC’s SX-Series supercomputers, the same machines that had been at the center of the suit four years before. NEC granted Cray exclusive rights to distribute the SX supercomputers in North America. Further nonexclusive rights for sales in Europe were also granted to Cray. The entire agreement was predicated on the dumping fines levied on NEC to be dropped.

NEC supercomputer development has continued to make substantial gains. NEC created the Earth Simulator (ES), designed to perform global climate modeling. It was at the time (2002–04) the fastest computer in the world. In May 2008 NEC announced that it had been awarded a contract to build a new version for the Japan Agency for Marine-Earth Science and Technology (JAMSTEC). NEC is expanding into other business areas as well. Also in May 2008, it announced that it was going to work with Nissan to produce lithium ion batteries for electric and plug-in hybrid vehicles. The plan calls for an investment of $115 million with the stated goal of producing 65,000 batteries a year by 2011.

In common with its rival Fujitsu, as well as some other Japanese companies, NEC has been plagued with accounting difficulties and accused of fraud. In 2006 the company was forced to admit that as the result of an internal investigation it had discovered that one of its subsidiary companies (NEC Engineering) had recorded nonexistent business deals and had done so for four years.

Bibliography:

Martin Fransman, Visions of Innovation: The Firm and Japan (Oxford University Press, 1999);
NEC, www.nec.com (cited March 2009);
Yoshitaka Suzuki, NEC Corporation, 1899–1999 (NEC Corporation, 2002).

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