NEC Joins Cleantech Gold Rush with Billion-Dollar Push
This article originally appeared on BusinessGreen.com and is used with permission.
NEC Corporation, Japan's largest PC manufacturer, today became the latest IT firm to announce that it is to push into the burgeoning clean tech market, unveiling plans to invest 100 billion yen (£760 million, $1.1 billion) over the next eight years in battery and smart grid technologies.
The firm has seen sales of PCs slide over the past decade and said that it was now looking to reposition itself to take advantage of the cloud computing and energy markets.
NEC lost 297 billion yen ($US3.2 billion) in the year ending March 2009, forcing it to cut 20,000 jobs, and sales fell by another 15 per cent in the financial year just ended.
In February, NEC announced it is to double its investment in cloud computing technology over the next three years as it looks to ramp up its cloud computing division to account for a quarter of its revenues.
But President Nobuhiro Endo told Bloomberg that the firm is now looking to change its core business even further, and will undertake a major investment program in its factories that make parts for batteries supplied to Nissan and other auto manufacturers.
The company forecasts annual sales from its energy business will reach 100 billion yen ($US1.1 billion) in the year ending March 2013 and revenue will triple in the five years after that, as the company expands its list of battery customers on the back of rising demand for electric vehicles.
NEC also makes chips that are used in smart meters and in 2009 began to sell chips that gave meters the functionality to feed information back up through the grid to utility providers.
The company's NEC Electronics division has nearly 50 percent of the Chinese market for smart meter chips, but currently boasts a global market share of just eight per cent. As a result, the firm is now looking to increase its share of the market as European nations begin to mandate the rollout of smart meters. By 2012, the firm aims to more than triple its revenues in the sector to 13 billion yen (US$143 million).
NEC is the latest in a long line of IT and electronics companies that have targeted the clean tech sector for growth, and only last week Japanese conglomerate Mitsubishi announced it is to invest $76m to support its new smart grid strategy.