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NEC Corp. and Hitachi Ltd. said Thursday they will not participate in the manufacturing phase of a government-led project to develop next-generation supercomputers so they can cut costs amid deteriorating business conditions.

NEC, which incurred a group net loss of ¥296.65 billion in business 2008, which ended in March, would shoulder over ¥10 billion in research and development costs if it continued to participate in the project.

Hitachi, another key member of the project facing tough times, followed suit later Thursday, announcing separately that it will exit the supercomputer project.

With the two electronics giants leaving the project, the government will likely face a fundamental review of the project to develop the world’s fastest supercomputers, which are expected to run at a maximum speed of 10 petaflops, or 10 quadrillion floating point operations, per second.

The project, led since 2006 by the Education, Sports, Culture, Science and Technology Ministry, is now at the final stage of detailed system design.

The government has so far invested about ¥115 billion in the project, which is expected to be completed by 2012.

Fujitsu Ltd. is also part of the project to develop the supercomputers, which can be used in simulating experiments for developing new drugs, predicting the paths of typhoons or studying the formation of galaxies.

NEC has been one of the global leaders in the field and plans to continue development of cutting-edge supercomputers even after it withdraws from the project.

The company made the Earth Simulator supercomputer, which the Japan Agency for Marine Earth Science and Technology uses for global warming projections.

Fujitsu CPU is fastest

Fujitsu Ltd. has developed the world’s fastest central processing unit, becoming the first Japanese company in 10 years to claim the top spot, company officials said Wednesday.

The new CPU, called Venus, runs 2 1/2 times faster than the product of its rival, Intel Corp., according to the officials. Fujitsu last held the record for the world’s fastest CPU in 1999.

Fujitsu’s new CPU, often called the computer’s brain, may be installed in a next-generation supercomputer that is planned to begin operation at Riken, the officials said.

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