NEC Establishes New Structure for Automobile Rechargeable Battery Business

Tokyo, Japan, Mar 30, 2006 - (JCN Newswire) - NEC Corporation (TSE; 6701; US: NIPNY) announced that NEC and Fuji Heavy Industries, Ltd. will today dissolve NEC Lamilion Energy Ltd., a joint venture of both companies, which develops manganese lithium-ion rechargeable batteries for automobiles.

In accordance with the agreement, Fuji Heavy Industries will transfer all of the shares it holds in NEC Lamilion Energy to NEC and NEC TOKIN Corporation, a subsidiary of NEC that carries out energy device business. NEC Lamilion Energy will continue to promote manganese lithium-ion battery business for hybrid and electric automobiles as a wholly-owned subsidiary of NEC.

Since NEC Lamilion Energy's establishment in May 2002, it has focused on the planning and development of rechargeable batteries, which have been developed to a level capable of becoming the global de facto standard through the integration of NEC's laminate-type manganese lithium-ion cell technology and Fuji Heavy Industries' battery pack technology. As a result, NEC Lamilion Energy has developed a long-life battery (10 years/150,000 miles) based on high-power cells (2700W/Kg at 25 degrees centigrade, SOC 50%, 10 sec), which it has supplied to more than 20 domestic and international automobile/auto parts manufacturers for industry evaluation. It has also achieved the development of vehicle integration technology via in-house evaluation, which was the initial goal of the joint venture company.

Recently, increased concern for the global environment has drawn attention to environmentally friendly automobiles such as the hybrid automobile (a vehicle powered by a gasoline engine and an electric motor) and the electric automobile. Rechargeable battery technology is one of the major challenges in the development of such automobiles, and its market volume is expected to surpass 30 billion yen in the year 2015. Amid this market environment, NEC Lamilion Energy will further continue to operate in the business of rechargeable batteries for automobiles by leveraging the combined strengths of its innovative development capability along with NEC TOKIN's know-how, cultivated through long years of experience in the battery business for industrial use. NEC Lamilion Energy will collaborate with NEC TOKIN in the fields of fundamental battery material technology research and mass production, in which the aim is to complete mass production technology that has already been developed and is currently being employed in a test production line at NEC TOKIN Toyama Plant. The restructuring is also aimed at expansion of NEC Lamilion Energy's strength in high-power and long-life battery technology to other industrial fields.

NEC and Fuji Heavy Industries have agreed to continue their partnership in development and manufacturing areas after the dissolution of the joint venture. NEC Lamilion Energy will maintain business relations with Fuji Heavy Industries regarding the development and production of rechargeable batteries for electric and hybrid automobiles, which includes its supply of products to Fuji Heavy Industries.