Hitachi Ltd. and NEC Corp. said Friday they have agreed to set up a 5.5 billion yen joint venture in October to develop and produce Internet routers and switches.

Under the agreement, Hitachi will put up 60 percent of the 350-employee venture’s capital, with NEC shouldering the remainder.

The two companies said they will supply middle- to upper-class routing systems and switches for users such as telecom carriers, the central and local governments as well as large companies.

Internet routers control the passage of data transmitted through Internet networks. Demand for routers is expected to rise among business users as Internet telephony services are becoming increasingly popular.

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