In a move to compete against Taiwanese and South Korean rivals, NEC Corp. and Mitsubishi Electric Corp. will merge their domestic and overseas computer monitor operations next January, officials of the two firms announced Friday.
The joint venture by the two major electric manufacturers will combine their development, manufacturing and marketing operations in the display monitor business.
NEC Home Electronics Ltd., a fully owned subsidiary of NEC Corp., currently conducts display monitor operations for the group.
NEC and Mitsubishi Electric are to invest equally in the venture, which will be capitalized at 2 billion yen and begin operations in April, although a name has not been decided.
The proposed firm, which would have about 700 employees, aims to sell about 10 million display monitors in fiscal 2002 and achieve 350 billion yen in sales the same year.
"As part of recent developments in the display monitor business, South Korean and Taiwanese firms are on the offensive. We can't survive without (the advantage of) scale," Koji Nishigaki, president of NEC Corp., told reporters.
Last year, the firms' combined sales in the monitor segment exceeded 200 billion yen, but both firms incurred losses, the officials said.
Last year, the prices of display monitors declined sharply in the global market, while Japanese firms suffered from the appreciation of the yen, the officials said. The proposed merger of the display monitor business will help lower costs in manufacturing and strengthen marketing capabilities, they said.