NEC

NEC Corporation (日本電気株式会社, Nippon Denki Kabushiki gaisha; an acronym for Nippon Electric Company) is a Japanese multinational information technology corporation headquartered at the NEC Supertower in Minato, Tokyo, Japan. It sells IT and network services, including cloud computing, artificial intelligence (AI), Internet of Things (IoT) platform, and telecommunications equipment and software to business enterprises, communications services providers and to government agencies. It is one of the five largest defense contractors in Japan. NEC was one of the world's largest personal computer and semiconductor manufacturers from the 1980s to the 2000s, but has largely withdrawn from manufacturing since the beginning of the 21st century, having spun off its PC business to Lenovo and its semiconductor business to Renesas Electronics and Elpida Memory. NEC is a member of the Sumitomo Group.

History

Overview Kunihiko Iwadare and Takeshiro Maeda established Nippon Electric Limited Partnership on 31 August 1898, by using facilities that it had bought from Miyoshi Electrical Manufacturing Company. Iwadare acted as the representative partner; Maeda handled company sales. Western Electric, which had an interest in the Japanese phone market, was represented by Walter Tenney Carleton. Carleton was also responsible for the renovation of the Miyoshi facilities. It was agreed that the partnership would be reorganized as a joint-stock company when the treaty would allow it. On 17 July 1899, the revised treaty between Japan and the United States went into effect. Nippon Electric Company, Limited was organized the same day as Western Electric Company to become the first Japanese joint-venture with foreign capital. Iwadare was named managing director. Ernest Clement and Carleton were named as directors. Maeda and Mototeru Fujii were assigned to be auditors. Iwadare, Maeda, and Carleton handled the overall management. The company started with the production, sales, and maintenance of telephones and switches. NEC modernized the production facilities with the construction of the Mita Plant in 1901 at Mita Shikokumachi. It was completed in December 1902. The Japanese Ministry of Communications adopted a new technology in 1903: the common battery switchboard supplied by NEC. The common battery switchboards powered the subscriber phone, eliminating the need for a permanent magnet generator in each subscriber's phone. The switchboards were initially imported, but were manufactured locally by 1909. NEC started exporting telephone sets to China in 1904. In 1905, Iwadare visited Western Electric in the U.S. to see its management and production control. On his return to Japan, he discontinued the "oyakata" system of sub-contracting and replaced it with a new system where managers and employees were all direct employees of the company. Inefficiency was also removed from the production process. The company paid higher salaries with incentives for efficiency. New accounting and cost controls were put in place, and time clocks were installed. Between 1899 and 1907 the number of telephone subscribers in Japan rose from 35,000 to 95,000. NEC entered the China market in 1908 with the implementation of the telegraph treaty between Japan and China. They also entered the Korean market, setting up an office in Seoul in January 1908. During the period from 1907 to 1912 sales rose from 1.6 million yen to 2 million yen. The expansion of the Japanese phone service had been a key part of NEC's success during this period. The Ministry of Communications delayed a third expansion plan of the phone service in March 1913, despite having 120,000 potential telephone subscribers waiting for phone installations. NEC sales fell sixty percent between 1912 and 1915. During the interim, Iwadare started importing appliances, including electric fans, kitchen appliances, washing machines, and vacuum cleaners. Electric fans had never been seen in Japan before. The imports were intended to prop up company sales. In 1916, the government resumed the delayed telephone-expansion plan, adding 75,000 subscribers and 326,000 kilometers of new toll lines. Thanks to this third expansion plan, NEC expanded at a time when much of the rest of the Japanese industry contracted.

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