Pioneer Corporation (TSE: 6773; NYSE: PIO) and NEC Corporation (TSE: 6701; NASDAQ: NIPNY) jointly announced today that they had concluded a Memorandum of Understanding, by which NEC is to transfer to Pioneer (i) all the shares NEC holds in its subsidiary, NEC Plasma Display Corporation, and (ii) all the intellectual property rights NEC holds in relation to plasma displays. In recent years Pioneer has been improving its business structures, reflecting its "select and focus" management policy, and one of its most important management strategies has been to further expand the plasma display business as a core of its current businesses. NEC has been developing its businesses, focusing on two core domains of integrated IT/network solutions and semiconductor solutions, and is advancing strategies that fit the distinctive characteristics of these two business domains. Regarding NEC's display business, although strong growth is expected in displays for TV set use, substantial funding is required to expand growth. Taking this into consideration, NEC in line with its promotion of policies to find external capital for new growth in the industry examined the possibility of creating an alliance aiming for large-scale advantages to develop business. In this business environment, Pioneer and NEC, which both independently develop and produce plasma displays, found that their respective technologies are familiar, and came to the conclusion that the integration of the highly-developed technologies and production capabilities of the two companies would enable them to demonstrate the maximum of their expertise and take the lead in the market, which will help meet the ever-rapidly increasing demand for plasma displays worldwide. Details of the transfer of shares, etc., as well as the date of transfer, will be determined at a later date, and will be announced accordingly. Outline of NPD Company name: NEC Plasma Display Corporation Headquarters: 7-1, 5-Chome, Shiba, Minato-ku, Tokyo, Japan
Tamagawa Office: 1753, Shimonube, Nakahara-ku, Kawasaki, Kanagawa, Japan
Kagoshima Plant: 2080, Ohnohara-cho, Izumi, Kagoshima, Japan President: Kenji Tokuyama Paid-in Capital: 10 billion yen Products: Plasma display sets and modules Sales: Approximately 50 billion yen (estimates for fiscal year, ending March 31, 2004) Employees: Approximately 1,100 employees (as of the end of January, 2004) End of release. Our editors wanted to know what that meant to NEC Visual Systems, which markets plasmas as well as other Pro AV and consumer AV products. This does not mean, they said, discontinuation of plasma sales. In fact, it should be business as usual with current and future plasma display products. Their response to us: "Pioneer will acquire all NEC plasma intellectual property rights. NEC's sales and marketing team has and will continue to offer plasma displays with end user driven features that maximize image quality for a wide variety of applications. Additionally, NEC will still provide its industry-leading channel programs and award-winning service and support. "As part of the contract, NEC will retain dedicated resources in Japan, targeting the continued growth of NEC's branded plasma display business in the Americas. "This announcement will not affect the availability of NEC plasma displays supplied in the Americas for partners and end user customers. NEC maintains excellent inventory of its 42", 50" and 61" branded plasma monitors. Customers will continue to have access to the same high quality products, reliable service and responsive support for which NEC is renowned." So, it appears NEC will contract out the manufacturing of plasmas (we're betting the acquired company gets at least some of the business) but NEC will continue to carry its line of NEC branded displays. Basically, nothing affects the channel. |
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