RNS Number:6795T
NEC Corporation
26 December 2003


                                                               December 26, 2003


  Announcement of the corporate separation of NEC's laser processing business


NEC Corporation ("NEC") today announced that at the meeting of its board of
directors held on December 25, 2003, it was resolved that NEC spin off its laser
processing business. NEC plans to establish a wholly-owned subsidiary (the "New
Company") and transfer NEC's laser processing business to the New Company by
means of the corporate separation or Kaisha Bunkatsu under the Commercial Code
of Japan effective April 1, 2004.



1. Purpose of the corporate separation

NEC's laser processing business is haighly competitive in the solid-state laser
market and the demand in the market is expected to be solid in the future. In
addition, this business is expected to expand rapidly in the market of laser
repairs for liquid crystal displays. In order to achieve further enhancement of
such laser processing business, NEC made a decision to call capital from third
parties after spinning off and integrating the laser processing business with
other related business of its other subsidiaries, and to conduct, under such
third parties' initiative, more active research and development activities as
well as rapid and efficient business operation specialized in laser processing.

For the purpose of establishing such business operation, NEC decided to transfer
its laser processing business to the New Company by the corporate separation,
and, at the same time, integrate the relevant businesses into the New Company:
NEC Laser & Automation, Ltd. ("NEC Laser & Automation"), a wholly-owned
subsidiary of NEC, will transfer its manufacturing and maintenance divisions to
the New Company by means of the corporate separation and NEC Robotics
Engineering, Ltd. will transfer its assets of the design and software
development divisions related to the laser business to the New Company,
respectively, effective on the same date as NEC's corporate separation above.
After such integration, NEC will sell all of its shares of the New Company to a
company to be financed by NEC, an investment fund which is managed by Japan
Industrial Partners, Inc. ("JIP") and the other company (the "Taking-over
Company"). NEC singed the stock transfer agreement with JIP today and the
corporate separation is supposed to carry out pursuant to such agreement. The
outline of the corporate separation is as follows:



2. Outline of the corporate separation

(1) Schedule of the corporate separation (tentative date)

        Incorporation of the New Company                   January 15, 2004
        Board approval (both NEC and NEC Laser &           January 29, 2004
        Automation)
        Signing of the agreement for the corporate         February 4, 2004
        separation (both NEC and NEC Laser & Automation)
        Extraordinary general meeting of shareholders for  February 23, 2004
        the approval of the agreement of the corporate
        separation (the New Company)
        Effective date of the corporate separation         April 1, 2004
        Date of commercial registration                    April 1, 2004



(2) Type of the corporate separation

(i) Type of the corporate separation

    Bunshagata Kyushu Bunkatsu under Commercial Code of Japan in which NEC is a
    transferring party and the New Company is a transferred party.

(ii) Reason for using the Bunshagata Kyushu Bunkatsu

    The New Company will allot all of its shares issued under corporate
    separation to NEC and NEC plans to transfer the shares of the New Company to
    the Taking-over Company.



(3) Allotment of the New Company's shares

    The New Company will issue 10,000 shares of its common stock and allot all
    the shares to NEC.



(4) Money to be paid to the New Company at the corporate separation

    None



(5) Assets, liabilities, rights and obligations to be transferred to or assumed
by the New Company

    Account receivable, inventories, tangible fixed assets, account payable,
    intellectual property rights, agreements, and other rights and obligations
    which belong to the laser processing business.

    Employees who are engaged in the laser processing business will be seconded
    to the New Company in the meantime.



(6) Prospects of payment of debts

(i) Prospects of payment of NEC's debts

    The book value of NEC's total assets will remain unchanged because NEC
    adopted the Bunshagata Kyushu Bunkatsu. In addition, the events which
    prevent NEC from paying debts have not occurred and are not expected to
    occur at present. Therefore, NEC is expected to pay its debts which will
    become due after the effective date of the corporate separation.

(ii) Prospects of payment of the New Company's debts

    NEC and NEC Laser & Automation will transfer its respective laser processing
    business to the New Company by the corporation effective April 1, 2004. In
    each corporate separation, the amount of transferred assets is expected to
    exceed the amount of transferred debts. In addition, the events which
    prevent the New Company from paying debts are not expected to occur at
    present. Therefore, NEC is expected for the New Company to pay its debts
    which will become due after the effective date of the corporate separation.



(7) The New Company's directors and corporate auditors to be appointed at the
time of the corporate separation: None



3. Outline of NEC and the New Company

(1) Company name    NEC Corporation (Transferring party) The New Company (Transferred party)

(2) Business areas  Sale of computers, communications    Design of laser processing equipment
                    equipment, electron devices and      and systems and development of
                    software, and provision of Internet  software, and manufacture, sale and
                    solutions including relevant         maintenance of these products as well
                    services                             as design and contract of
                                                         construction related to these
                                                         products.

(3) Date of         July, 1899                           January 15, 2004 (tentative date)
incorporation

(4) Head office     7-1, Shiba 5-chome, Minato-ku, Tokyo 7-1, Shiba 5-chome, Minato-ku, Tokyo

(5) Representative  Akinobu Kanasugi, President          Kazunari Egami, President

(6) Stated capital  244,726 million yen (as of March 31, Planned to be 30 million yen as of
                    2003)                                January 15, 2004

(7) Outstanding     1,656,268 thousand shares (as of     Planned to be 600 shares as of
shares              March 31, 2003)                      January 15, 2004

(8) Shareholders'   672,053 million yen (as of March 31, Planned to be 30 million yen as of
equity              2003)                                January 15, 2004

(9) Total assets    2,701,096 million yen (as of March   Planned to be 30 million yen as of
                    31, 2003)                            January 15, 2004

(10) End of fiscal  March 31                             March 31
year

(11) Number of      24,175 (as of March 31, 2003)        Planned to be zero as of January 15,
employees                                                2004

(12) Major          NTT Group, government and other      None
customers           public agencies, etc.

(13) Major          Japan Trustee Services Bank, Ltd.    Planned to be wholly owned by NEC as
shareholders and    (Trust Account) : 4.24%              of January 15, 2004
shareholding ratio
                    Sumitomo Life Insurance Company :
                    3.20%

                    The Master Trust Bank of Japan, Ltd.
                    (Trust Account) : 3.15%

                    Nippon Life Insurance Company :
                    2.88%

                    The Dai-ichi Mutual Life Insurance
                    Company : 2.58%

                    The Chase Manhattan Bank N.A. London
                    : 2.44%

                    (as of March 31, 2003)

(14) Main bank of   Sumitomo Mitsui Banking Corporation,
account             The Sumitomo Trust and Banking
                    Company Limited

(15) Relationship   The new company is supposed to be a wholly owned subsidiary of NEC.
between two
companies



(16) NEC's financial results for the last three fiscal years (in millions of yen
except per share figures)

End of fiscal year            March 31, 2001          March 31, 2002          March 31, 2003

Net sales                          4,099,323               3,562,371               2,781,436

Operating income                      93,012                (77,847)                  24,890
(loss)

Ordinary income                       63,917                (96,507)                   6,119
(loss)

Net income (loss)                     23,670               (286,219)                (14,917)

Net income (loss)                      14.45                (172.87)                   (9.1)
per share (yen)

Dividend per share                     11.00                    6.00                    0.00
(yen)

Shareholders' equity                  628.91                  444.04                  406.26
per share (yen)



4. Description of business to be separated

(1) Business to be separated

    The laser processing business which NEC's Laser Solutions Division is in
    charge of is to be separated. After the corporate separation, the New
    Company is expected to have sales of approximately 9 billion yen and about
    270 employees.



(2) Total assets and liabilities which belong to the business to be separated

    Total assets of the business to be separated at the end of March, 2003 was
    approximately 4 billion yen and liabilities of the business to be separated
    at the same date was approximately 2.5 billion yen.



5. Outline of NEC after the corporate separation

        (1) Company Name             NEC Corporation

        (2) Business areas           Sale of computers, communications
                                     equipment, electron devices and software,
                                     and provision of Internet solutions
                                     including relevant services

        (3) Head office              7-1, Shiba 5-chome, Minato-ku, Tokyo

        (4) Representative           Akinobu Kanasugi, President

        (5) Stated Capital           329, 976 million yen (As of December 17,
                                     2003. There is no decrease in stated
                                     capital due to the corporate separation
                                     above.)

        (6) End of fiscal year       March 31

        (7) Effect on NEC's          The corporate separation above will have
        operating results            little effect on NEC's operating results.





                      This information is provided by RNS
            The company news service from the London Stock Exchange
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