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To: Don Green who wrote (76394)	7/31/2001 3:30:35 PM
From: Don Green	Respond to of 93625

NEC To Withdraw From DRAM Business By 2004 By Alex Romanelli, Electronic News Online -- Electronic News, 7/31/01 e-insite.net NEC Corp. today announced its intention to fully withdraw from the DRAM business and said it will cut another 4,000 jobs. Tokyo, Japan-based NEC said these measures were part of a number of structural reforms it plans to put in place as part of its mid-term management strategies, focusing on broadband and mobile applications. The reforms are part of a plan to ensure an annual sales growth rate of 6 percent. For the time being, NEC (nasdaq: NIPNY) said it would continue to supply Elpida Memory Inc. with DRAM on a contract-manufacturing basis, mainly at NEC Hiroshima Ltd. However, NEC intends to transfer this business to Elpida and by 2004 will have withdrawn entirely from the DRAM industry, except as a shareholder of Elpida. Elpida is the joint venture begun by NEC and Hitachi. In April, NEC disclosed plans to end DRAM production in the United States and United Kingdom. "As you know there are ups and downs in the semiconductor business and the DRAM business is a case in point," said an NEC spokeswoman. "NEC at this time has decided to focus on System LSI which are more stable and leading away from a business which is really unstable. When the DRAM business recovers we can still obtain some profits through our investments in Elpida." As part of the shift in focus to broadband and mobile businesses, NEC said intends to establish NEC Compound Device Ltd. in October to concentrate on its optical and microwave semiconductor business. NEC Electron Devices will focus on System LSIs and the company said it plans to establish a business structure organization and corporate culture that promotes the System LSI business. To assist in these plans, NEC will axe about 4,000 jobs worldwide, with about 2,200 being contracted employees. Roughly 2,500 of the lay-offs will take place in Japan, the spokeswoman said. About 600 of the job cuts will take place at NEC Semiconductors (UK) Ltd., Livingston, Scotland. NEC plans to reduce its monthly production capacity for 8-inch wafers at the Livingston facility from 28,000 to 15,000 this year. The 700 US job cuts included in this latest round of lay-offs are actually those previously announced in April, according to NEC s spokeswoman. The remainder of the job cuts will take place in Asia. NEC also announced plans to consolidate a number of its facilities in the Far East. The company will close its 6-inch trial fab line at its Sagamihara plant, and consolidate R&D/testing fabrication into its UC facility. Three semiconductor assembling companies; NEC Fukuoka, Ltd., NEC Oita, Ltd. and NEC Kumamoto, Ltd.; will be reorganized and consolidated into NEC Semiconductors Kyushu, Ltd., which will be established in October. NEC Yamagata Ltd. s two assembly plants, will be merged into one location within the second half of this fiscal year.