Technical Insight
NEC Divests Optical and Microwave Operations (News from Japan)
NEC is to divest its optical semiconductor operations together with its microwave compound semiconductor and silicon activities into a new company, to be formed in October 2001. NEC identifies these devices as key enablers of broadband and mobile networking equipmentthe move is aimed at reinforcing NEC s position as global leader in this area while maximizing the overall corporate value of the NEC Group, says the company. The new spin-off is expected to generate first year sales of 120 billion ($1.02 billion) and will employ around 500 people. NEC will exercise 100% ownership and intends to take the as-yet unnamed company to an initial public offering within two years. Device R&D will be located at a facility within the NEC Kansai plant in western Japan and at Tsukuba City, Ibaraki Prefecture. NEC says this will allow the new company to achieve a highly integrated research, development and production organization, and believes this will treble sales of optical and microwave devices from 100 billion ($852 million) in fiscal year 2000 to 300 billion ($2.55 billion) by 2005. NEC is one of the world s largest manufacturers for optical networking components, including 2.5 and 10 Gb/s laser diodes and InGaAs detectors for WDM applications, in addition to GaAs-based microwave RFICs used in wireless handsets and a range of other applications. According to Japan s Nihon Keizai Shimbun newspaper, sales of NEC s optical and microwave chips for high-speed communications currently account for around 9% of the world market. NEC says it will also consider additional investment in California Eastern Laboratories (CEL), a company based in Santa Clara, California that represents NEC in the North American market. The new semiconductor firm will also select foundry partners in Japan and Taiwan and investigate opportunities with optical semiconductor companies. NEC Develops SiGe RF Transistor In more news, NEC has begun shipping samples of a high-performance SiGe PA for use in W-CDMA cell phones and multimedia devices. The chip achieves a noise factor of 0.9 dB and a power gain of 14.5 dB, 60% higher than conventional silicon transistors. The sample price is 27 cents, and the company will launch production at 2.5 million units per month in April, ramping to 30 million units per month by the end of 2001. NTT Electronics Builds WDM Device Plant NTT Electronics has constructed a manufacturing plant in Naka, Ibaraki Prefecture for WDM devices at a cost of 14 billion ($12 million). With a total floor space of 20,000 m2 (215,000 sq.ft.), the plant will produce WDM devices, semiconductor lasers and other components for supply to major communications equipment makers including Lucent Technologies. One of the largest of its kind, the factory expands the company s WDM device production capacity by 300400%. NTT Electronics is 86% owned by the NTT group and posted sales of 28.3 billion ($240 million) in the year ended March 2000.
