In a effort to play a larger part in the ongoing information technology revolution, computer manufacturer NEC Corp. and electric appliance maker Mitsubishi Electric Corp. on Wednesday unveiled expansionary business plans.
NEC plans to spend 600 billion yen on mergers and acquisitions of Internet-related businesses over a three-year period through March 2003, said Koji Nishigaki, president of Japan’s leading computer maker.
“On top of some 1 trillion yen in investments on facilities and equipment (in the three-year term), we are planning to make 600 billion yen in equity investments to become more competitive in the global market. We already have some projects ongoing,” Nishigaki said.
The firm plans to finance the additional 600 billion yen in investments by selling assets and capital gains through initial public offerings of its affiliated companies.
Nishigaki also said that the firm is considering listing its stock on the New York Stock Exchange during the three-year period.
If realized, the move would give NEC a tool to acquire stocks of other companies through share-swap deals.
The company aims to boost its consolidated sales from 4.99 trillion yen in fiscal 1999 to 6.7 trillion yen in fiscal 2002 by focusing on fast-growing Internet-related businesses.
Meanwhile, Ichiro Taniguchi, president of Mitsubishi Electric, announced a revised plan to increase investment in semiconductors in fiscal 2000 from the initially targeted 100 billion yen to 150 billion yen, which would mark the company’s largest investment in semiconductors.
The firm’s investment in semiconductor-related facilities and equipment was 57 billion yen in fiscal 1999.
“The spread of information technology is accelerating. We will put our corporate resources into the field of telecommunications and semiconductors,” Taniguchi said.
Mitsubishi Electric will spend most of the additional 50 billion yen on expanding production facilities at its Saijo factory in Ehime Prefecture.
The increased investment is expected to help the company meet the growing demand for large-scale integration circuits and memory chips used for cellular phones and other digital information devices.
The nation’s major computer and electric appliance companies have been increasing investments in electric devices in response to severe losses in semiconductor businesses suffered in recent years.