NEC to shift 70% of PC production to China for sale in Japan
( 2002-02-27 14:01 ) (7 )

Japan's NEC Corp. said Wednesday it would shift production of personal computers (PCs) built for Japanese users to China from the spring to cut costs and turnaround loss-making operations.

"We plan to manufacture and assemble 70 percent of PCs sold in Japan in China," said an NEC spokesman. "This will start from next quarter ... somewhere between April and June."

The firm already makes PC parts in China but most of the assembly is done at two domestic factories -- in Gunma, 100 kilometres (62 miles) north of Tokyo, and Yonezawa, 250 kilometres north of the capital.

But China has become the global hub of PC production and NEC decided to move there to benefit from the expertise of other manufacturers, said the spokesman.

"It is also much cheaper (to produce is China)."

NEC would slash PC production in Japan, concentrating all manufacturing and development at its Yonezawa plant, while converting the Gunma unit into a service centre.

"We will establish a new company there and shift the manufacturers to service personnel," the spokesman said.

Some 650 people work at Gunma, but the new firm will only employ around 500.

"If manufacturing personnel do not want to change jobs then may be some will leave ... others will move to Yonezawa," explained the spokesman.

By increasing output in China, NEC hopes to pull its PC business out of the red in the second half of fiscal 2002, he said.