NEC 2007 Annual Report Download - page 29

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Won the Grand Prize for Compo-
nents in the Fourth Component
Manufacturing Awards held by The
Nikkan Kogyo Shimbun, Ltd.
The development efforts behind
IMAPCAR were recognized for its
originality and for adding high value
to this component.
IMAPCAR Image-recognition LSI for Automobiles
Growth Strategies
In February 2007, the semiconductor area
announced a business strategy targeting a turn-
around its financial performance. NEC believes
that further improvements in this business’ cost
structure is necessary, facing adverse market
conditions expected in fiscal 2008, and plateaued
sales growth. Accordingly, NEC will implement
the following structural reforms.
First, NEC will focus resources on its most
competitive products, including semiconductors
for use in automotive microprocessors, and
digital consumer products such as the EMMA
series in the digital video field. NEC recognizes
that it cannot develop competitive products or
generate earnings commensurate with R&D
expenses if resources are spread too thin. NEC
will also reduce fabrication lines in Japan from
nine to four lines to concentrate production, to
accelerate cost reductions owing to delays in
consolidating production lines. With respect to
assembly and testing, NEC will speed up their
relocation overseas and realign its network of
plants in Japan. On the organizational front, NEC
implements organizational changes by business
field, specifically System on Chip (SoC), micro-
processors, and discrete semiconductors. This
is aimed at enhancing the Electron Devices
business’ value chain from sales to development
and production, and to expedite business
execution. Furthermore, NEC will work to improve
its cost structure by reducing fixed costs.
Through these and additional initiatives, NEC
will work to achieve a turnaround in performance
by leveraging the Group’s strengths in system
and software development and project manage-
ment capabilities, as well as its advanced tech-
nologies in the semiconductor business.
27