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NEC and Toshiba Unify Space Business

13 December, 2000

Joint Venture Paves Way to Enhanced Domestic and International Presence

NEC Corporation
Toshiba Corporation

Tokyo--NEC Corporation and Toshiba Corporation today announced the unification of their space business operations in a joint venture that will expand domestic business and reinforce their international competitiveness.

Under the terms of an agreement announced today, NEC and Toshiba will establish a new joint venture in April 2001, and transfer their space operations to it during the following six months. The move is expected to support a heightened presence in the commercial space sector, particularly in space infrastructure, spacecraft and ground systems. The unified business will enjoy increased resources, and offer superior space related systems and cost competitiveness.

The new joint venture will have an initial capitalization of seven billion yen, 60% held by NEC and 40% by Toshiba, and its president and CEO will be appointed by NEC. Its business domain will extend from consultation on space products and systems to the planning, design, manufacture, integration and testing, sales, operation and servicing of satellites, manned space stations and space systems, including spacecraft onboard equipment and other subsystems or components, and ground systems. The new company is expected to achieve sales of 100 billion yen in 2005, five years after it starts business.

Back ground of cooperation

Japan's domestic market for launch vehicles, ground systems, spacecraft and the international space station, while valued at 200 to 300 billion yen a year, is essentially flat, with no growth anticipated in coming years. The government is the main source of orders, and little commercial growth is anticipated. Overseas, the story is of a three to four trillion yen market that has seen numerous large-scale mergers and fast intensifying competition in recent years.

Responding to these circumstances, NEC and Toshiba began the discussions leading to today's announcement in December 1999. Both companies see unification as a necessary means to improve the competitiveness of their space business and to secure expansion in Japan and overseas.

NEC and Toshiba can boast leading-edge technologies that have already made significant contributions to the design and integration of Japan's engineering test satellite and space-science satellite systems over the years. NEC is strong in telecommunication systems, transponders, optical sensors, attitude sensors and ground systems, and Toshiba in structures, thermal control, attitude control, solar array paddles and robotics. Uniting these complementary strengths will create a highly capable company that will enjoy an enhanced presence in the space business.

The new joint venture company will adopt a proactive approach to overseas markets. In addition to the satellite subsystems and components that have already found a wide market, they will intensively promote its capabilities in satellite systems.

Space business activities of NEC and Toshiba

NEC has a long record of achievement in the satellite business. The company developed Japan's first satellite, Osumi, which was launched in 1970. In 1975, NEC developed Kiku-1, the National Space Development Agency of Japan's (NASDA) first engineering test satellite, and since then had provided system integration for the Himawari series of geostationary meteorological satellites and Momo-1, Japan's first real earth observation satellite. NEC is actively expanding its overseas business. Its transponders and sensors are widely used in European and the U.S. satellites, and recently the company and Russian Satellite Communications Company entered into a comprehensive alliance on the payload for a Russian commercial telecommunications satellite.

Toshiba entered the space business through its participation Yuri, the world's first experimental broadcasting satellite. The company's subsequent contributions to the business including development of the large-scale three-axis satellite attitude control and robot arms used in Japan's experimental module for the international space station. In recent years, Toshiba has also developed the large deployable reflector that is to be integrated into the ETS-VIII engineering test satellite. Toshiba also supplies solar array panels to satellite manufacturers overseas, and is a partner in the SkyBridge plan for satellite-based high-speed communications services.

Outline of Joint Venture

Company NameTo be decided
HeadquartersYokohama, Kanagawa Prefecture
Capital7 billion yen
ShareholdingNEC 60%; Toshiba 40%
ExecutivesPresident & CEO: appointed by NEC)
Full-time directors: three from NEC, two from Toshiba
Part-time directors: one from NEC, one from Toshiba
Employeesapproximately 1,200
EstablishmentApril 2001

Press Contacts

Ken Fukuchi
Akiko Shikimori
Corporate Communication Division, NEC Corporation
Phone: ++81-3-3798-6511
Fax: ++81-3-3457-7249

Midori Suzuki
Corporate Communications Office, Toshiba Corporation
Tel: +81-3-3457-2105
Fax: +81-3-5444-9202

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