NEC Stock

NEC Corporation provides information and communication technology (ICT) solutions for government entities, communications service providers and other business enterprises in Japan and internationally.

Across its business segments, the company focuses on utilizing its core competency in system integration to create solutions that are applicable in various customer operating environments, ranging from large-scale government infrastructure (social security systems, air traffic control and emergency response systems) to company-specific information technology systems and network infrastructure (hardware and software solutions and consulting on matters, such as server infrastructure, operation management software and wireless access networks). The company is also investing in the development of new technologies and solutions, including artificial intelligence and big data analytics, as well as biometric technology infrastructure.

Segments

The company operates through six segments: Public Solutions, Public Infrastructure, Enterprise, Network Services, System Platform, and Global.

Public Solutions

This segment provides the following products and services primarily to local and regional government entities and medical institutions in Japan:

System Integration and Development for Local and Regional Governments: This includes system integration and solutions relating to resident registration systems, such as Japan’s ‘My Number’ individual identification system and administrative information processing and management systems.

System Integration and Development for Healthcare Services Providers: This includes system integration and solutions relating to electronic medical record systems, hospital accounting systems, and systems for regional medical service liaison services.

System Integration and Development for Fire Control, Disaster Prevention, Transportation and Traffic, and Other Public Services: This includes ICT systems for fire control and disaster prevention services, transportation and traffic control systems for Japanese railroad operators, and highway toll systems.

System Integration and Development for Medium-Sized Enterprises: This includes system integration and solutions relating to enterprise resource planning systems, business process outsourcing systems, systems for controlling street lights, and systems for automated services.

Public Infrastructure

This segment services Japanese national-level government organizations and enterprises that support national and social infrastructures primarily in Japan. The operations of Japan Aviation Electronics Industry, Limited, which is a consolidated subsidiary, are also included in this segment. The company primarily services the following categories of customers:

Government Agencies: This includes system integration and solutions for Japanese national government agencies and educational and other institutions, including those for Japanese national social security, tax administration and postal tracking; business license application processing; police operations; transportation and traffic management systems and satellite technology; data transmission control; immigration control; biometrics-related solutions, including facial recognition technology for airport boarding and customs procedures; and public safety services.

Aviation, Space and Defense Sectors: The company offers air traffic control management systems; satellites, satellite control systems and satellite management services for Japanese national space projects, such as the Hayabusa 2 project operated by the Japan Aerospace Exploration Agency, to send a spacecraft to monitor an asteroid; and communications systems for the Japanese Ministry of Defense.

Media Industry: The company offers broadcasting, studio, and typesetting and editing systems for broadcasting, including 4K and next-generation 8K satellite broadcasts.

The company provides products and services designed to support the stable and secure operation of key national and social infrastructures, while investing in advanced technologies, including biometric technologies, such as facial recognition, and space-related technologies.

Enterprise

This segment provides system integration and development services, including consulting, design and implementation, system maintenance and support services, and system outsourcing and cloud services, as well as related equipment, to business enterprises especially in the manufacturing, retail and services, and financial sectors primarily in Japan. Specifically, the company provides the following products and services:

Manufacturing Sector: This includes system integration and solutions relating to global supply chain management systems, design management systems, production management systems and sales management systems.

Retail and Services Sectors: This includes system integration and solutions relating to retail head office and sales outlet management systems, and distribution and logistics management systems. The company has worked with major convenience store chains to design labor-saving systems that utilize payment by facial recognition, targeted advertising, facility monitoring (the monitoring of in-store refrigerators) and restocking assistance.

Financial Sector: This includes system integration and solutions relating to core banking systems, including digital identity verification solutions, branch systems and enterprise systems for insurance and securities companies.

Network Services

The company’s Network Services business segment provides the following products and services to customers in the telecommunications market primarily in Japan:

Mobile Phone Network Base Stations: This includes development, manufacturing and maintenance of, and operation support for, mobile phone network base stations using various communications technologies, such as 5G.

Fixed and Mobile Phone Networks: This includes development, manufacturing and maintenance of, and operation support for, fixed and mobile phone network systems (other than base stations), such as optical and internet protocol, transmission systems, as well as routers and switches.

ICT Solutions for Telecommunications Carrier Companies: This includes development and maintenance of, and operation support for, ICT solutions for payment processing and administrative operations of telecommunications carrier companies, including operation support systems and business support systems.

Enterprise Network: This includes network services for ICT systems, including wireless routers, telephone systems and other network connectivity equipment, unified communications solutions for business computer networks, and operation and business support systems for enterprises.

System Platform

This segment provides hardware and software products as well as maintenance services to customers primarily in Japan:

Non-Customized Products: This includes manufacturing and sale to government agencies, local governments and business enterprises of hardware, such as servers, mainframes, storage devices and wireless local area network routers, software, such as database software, and middleware such as application servers, not customized for any specific industry or user, as well as sale of non-customized personal computers for business use to such customers. The company offers, its SX-Aurora TSUBASA platform is a computer platform that uses a vector processor previously only found in supercomputers. This platform has various models to correspond to a range of customer needs, enabling processing of large quantities of data.

Customized Products: This includes manufacturing and sale of customized hardware, such as supercomputers, mainframes, point-of-sale systems and automatic teller machines, as well as software, such as integrated operation management software, to the financial, retail and logistics sectors, as well as research and academic institutions.

Maintenance Services: This includes provision of hardware maintenance and operation support services for government agencies, local governments and business enterprises.

Global

This segment conducts the following five lines of business in overseas markets outside of Japan:

Safer Cities: This includes public safety solutions, including biometric solutions, such as facial recognition and fingerprint identification that could be used in contexts, such as airport security, and digital government solutions, including ICT platforms for electronic public administration services, for government and public projects.

Software Services for Service Providers: This includes operation support systems, business support systems, software-defined networking (SDN) and network functions virtualization (NFV) solutions for communications service providers. The company offers its SDN and NFV solutions for communications service providers on a global basis by taking advantage of the technologies of Netcracker Technology Corporation, its subsidiary in the United States.

Network Infrastructure: This includes manufacturing, sale, installation and maintenance of submarine systems (submarine cable systems and ocean observation systems), as well as mobile wireless backhaul equipment.

System Devices: This includes sales of displays and projectors, as well as the provision of related software services.

Energy Storage Solutions: This includes sale, installation and maintenance of large-capacity energy storage systems for renewable energy and other projects.

Others

In addition to the foregoing, the company provides data center infrastructure solutions, security solutions and other services and products to customers mainly in Japan.

Customers, Sales and Marketing

The company provides its products and services to customers located in Japan and overseas. It primarily sells its products and services directly to customers. In some cases, the company also sells its system platform products and services indirectly to customers through third-party contractors. For large-scale public and commercial contracts, the company performs its services based on customary negotiated contracts and contracts obtained through a bidding processes.

Intellectual Property

As of March 31, 2020, the company held approximately 47,000 patents issued under Japanese law and laws of other jurisdictions and has various Japanese and foreign patent applications pending. The company also owns various software and other copyrighted materials.

Competition

Public Solutions: In the Public Solutions business segment, the company competes with various large Japanese multinational ICT solutions companies capable of performing large-scale and highly complex government and public service contracts for system integrations, development and solutions projects for local governments, public service providers and healthcare service providers. These competitors include Fujitsu Limited, Hitachi, Ltd. and NTT DATA Corporation.

Public Infrastructure: In the Public Infrastructure business segment, the company competes with mostly the same competitors as those in the Public Solutions business segment, as well as Toshiba Corporation and Mitsubishi Electric Corporation for public infrastructure, defense and other projects.

Enterprise: In the Enterprise business segment, the company competes mostly with the same competitors as those in the Public Solutions business segment, particularly for large-scale and highly complex commercial projects, as well as with large multinational ICT service providers, such as IBM Corporation and Accenture plc.

Network Services: In the Network Services business segment, the company’s main competitors are large multinational information and data communications technology providers, including wireless communications technology companies, such as Fujitsu Limited, Telefonaktiebolaget LM Ericsson, Nokia Corporation and Huawei Technologies Co., Ltd.

System Platform: In the System Platform business segment, the company competes with a small number of large multinational ICT hardware and software providers, such as Fujitsu Limited, Hitachi, Ltd., IBM Corporation, Dell Technologies, Inc., Hewlett Packard Enterprise Company and Toshiba Corporation.

Significant Events

In October 2020, NEC Corporation and Analog Devices, Inc. announced that they have teamed up to design a 5G Network Massive MIMO Antenna Radio Unit for Rakuten Mobile. The radio unit adopts ADI’s fourth-generation wideband RF transceiver solution to achieve high precision Massive MIMO and possesses a 5G open vRAN interface corresponding to Rakuten Mobile’s end-to-end fully virtualized cloud-native mobile network. It delivers large capacity transmission with high efficiency by using 3.7GHz frequency Massive MIMO and digital beamforming technology. The cloud-native virtual network heralds a major shift in how communications providers can offer high-speed internet access worldwide, at significantly lower costs, made possible without the maintenance, upkeep, repair and labor costs associated with the physical infrastructure that hinders conventional networks. NEC has already started shipping the 5G Network Massive MIMO Antenna Radio Unit to Rakuten Mobile. ADI’s fourth-generation wideband RF transceiver integrates quad channel transmitters, receivers and Digital Pre-Distortion (DPD) in a single chip. The radio is fully software reconfigurable and covers all sub-6GHz 5G frequency bands, simplifying radio designs. NEC’s 5G equipment utilizes highly accurate digital beamforming for efficient high-capacity transmission. The system also features seamless installation, achieved through circuit integration.

History

The company was formerly known as Nippon Electric Company, Limited and changed its name to NEC Corporation in 1983. The company was founded in 1899. It was incorporated in 1899.