News Article

NEC To Merge Compound Semiconductor Arms

The Japanese conglomerate's consolidation is to cut its seven electronics businesses to only three, in a bid to cut its losses in this sector.

The businesses that perform NEC Electronics III-V manufacturing are to become a single unit, but will escape job losses or plant closures.

“The integration of NEC Kansai and NEC Fukui does not require that people or equipment be eliminated or transferred," a spokesperson for NEC told compoundsemiconductor.net.

The Japanese giant does not have a dedicated compound semiconductor business unit, instead grouping these technologies in its Discrete and Integrated Circuit division. NEC Kansai previously performed front-end processing and NEC Fukui performed back-end processing within this segment.

NEC hopes that Kansai s 2300 and Fukui s 850 employees will feel performance improvements and little else from the reorganization. “The reorganization is meant to enhance efficiency in development and manufacturing and will not significantly affect NEC Electronics' compound semiconductor business," the company said.

NEC is also reorganizing the rest of its electronics business. Elsewhere, its 700-employee Sagamihara 300 mm silicon prototyping and development operation will move and integrate with its 1500 strong Yamagata volume production facility.

By combining NEC Kyushu, NEC Yamaguchi, and NEC Semicon Package Solutions the microcomputer business unit will benefit from the same kind of “seamless front-end and back-end manufacturing capabilities" as the compound semiconductor companies.

NEC Electronics made a loss of ¥3 billion ($26 million) in the six months to September 30 and has not made a profit since 2005. The current reorganization is the latest in a number of management changes and restructuring efforts that have sought to improve the company's fortunes since then.

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