NEC to Boost Chip Spending by One-Third

TSURUOKA, JAPAN (04/28/2000) - NEC Corp., one of the world's largest manufacturers of semiconductors, today said it intends to increase by 33 percent the amount of money it spends on its chip making facilities this year.

The planned increase was announced by NEC president Koji Nishigaki who was speaking at a news conference here today during the opening of the company's newest chip fabrication plant. In the current fiscal year, which began on April 1, NEC plans to invest a total of 200 billion yen (US$1.9 billion) in its chip facilities, up from 150 billion yen in fiscal year 1999, Nishigaki said.

Behind the big increase in spending is a desire to stay competitive as the chip market goes through a period of rapid expansion caused by digital and multimedia applications, he said. Over the next two to three years, the company is expecting to see strong growth as a result of the roll-out of third generation wireless and mobile terminals.

More than half of the investment will be distributed between the company's five domestic factories.

The Kyushu plant in western Japan will see an investment of 37 billion yen to equip it to produce a chip for the new Nintendo games console that will be launched later this year. Investment will almost double at the Hiroshima plant to 22.5 billion yen to fund an increase in wafer production from 26,000 per month to 30,000 per month and a move from 0.18 micron to 0.15 micron technology.

NEC's Kansai plant will see investment jump to 34 billion yen to fund a new production line for LCD (liquid crystal display) driver chips, the Yamaguchi plant will receive 4.5 billion yen and the Yamagata plant, where Nishigaki was speaking, will receive 20 billion yen in investment in the coming year.

Overseas, U.S. operations will receive 6 billion yen, UK operations will get 10 billion yen, the company's Irish plant will receive 500 million yen, investment in Singapore will be 2.5 billion yen, Malaysia will get 1.5 billion yen, investment in Indonesia will be unchanged at zero, NEC's Beijing plant will receive 4.5 billion yen and NEC Shanghai will get 30 billion yen to fund an increase in output from 10,000 to 20,000 wafers per month.

NEC Corp., in Tokyo, can be found online at http://www.nec.co.jp/.

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