Recently NEC Electronics Corporation published its latest financial results and outlined its strategy for achieving a better profitability. At european level, the company wants to reinforce its position in automotive, digital consumer, communications infrastructure and industrial market. In general, the objective is to continue to expand resources in the Old Continent, to provide a suitable support at the system level and customer service to increase the business base. In this scenario, we interviewed Rob Green, president of NEC Electronics Europe, particularly about the strategy in the industrial sector.
Looking at the european scenario in electronics space, in general, what is for NEC the role of the industrial market compared to the consumer market? Is there the same level of commitment on these two areas?
The industrial market is a very important market for NEC Electronics in Europe. The business needs of the industrial market have similarities to the automotive and communications infrastructure market, including the need for high product quality and long life cycles. NEC Electronics, as an IDM, has the control of the product from the design to manufacturing and so is positioned well to maintain products for these lifecycles while maintaining highly reliable and competitive product. Europe has a number of world leaders, for example, in the industrial automation and building management sectors. The forty percent (40%) of our business in Europe is in the industrial sector which includes the distribution channel. In other words, within this 40%, both our direct NEC sales to OEMs and our sales to distributors are included.
What are in industrial electronics the key market areas on which NEC is now focusing on? Inside these marketplaces, what are the specific product segments and applications NEC wants to develop in the next months to realize its European strategy?
We focus on the major application areas of the industrial sector and aim to provide semiconductor solutions to fit the application needs. These sectors are motor control, including white goods; industrial automation, building management, EPOS and PC peripherals, and personal healthcare.
The energy-saving and environmental requirements of these applications in the future are generating the need for more electronic control, replacing previous electromechanical solutions. The application typically centres around an ASIC, an ASSP or a microcontroller: the large range of microcontrollers including 32-bit, 16-bit, 8-bit and low-pin-count products means that we can support a wide spectrum of needs. NEC Electronics is one of the leading suppliers of 32-bit microcontrollers worldwide and our market share in all micros is rapidly increasing. We will typically focus on a solution consisting of a microcontroller, proven software drivers and protocol stacks, together with appropriate other devices such as power management devices, optocouplers and TFT display panels. This would be supported by full proven reference boards and application documentation.
What are next steps NEC wants to do to reinforce its organisation and presence in Europe?
Today we already have a substantial infrastructure in Europe: we have over 100 engineers in chip design at our European Technology Centre ( ETC) in Düsseldorf. We also have system engineering departments for automotive, digital consumer, communications and industrial applications and also a team of application engineers for direct customer support. We have recently installed the European Quality Centre in Düsseldorf, which is fully equipped to do local failure analysis of microcontroller-based products ensuring a swift turnaround time to customer. This facility is now being extended to include automotive/industrial product qualification in 2007.
We have a healthy distribution network including Arrow, Avnet-Memec, Rutronik and Gleichmann as distributors working across the national boundaries of Europe. There are many examples partnerships but one recent one of note is with Siemens Industrial Division in the field of industrial networking: we are developing a range of ERTEC (Enhanced Real-Time Ethernet Controller) chips which form the basic building blocks for industrial communications networks and support the PROFINET standard. The first devices are already available
and are getting an enthusiastic response from the market.
What are the market objectives and challenges NEC wants to achieve in Europe this year?
During 2007 we have objectives to continue to grow our market share and to grow our total business despite a soft market situation right now. Our expanding microcontroller portfolio will enable steady business growth in the automotive and industrial sectors, supported by strong growth in the areas of Power Mosfets and optocouplers. As European TV broadcast moves to the digital domain then we will see rapid growth in our EMMA ( Enhanced Multimedia Architecture) MPEG decoder-based products for digital tv and set top boxes, especially in Turkey where we have recently opened a technical support office. Our participation in mobile phones will also increase as a result of more multimedia functionality being utilised as a differentiating factor by manufacturers and service-providers. And by confirming our commitment to future ASIC technology investment, now developing 45nm geometry library design, then will also improve our position within the industrial and communications infrastructure markets. We can foresee a double-digit growth in 2007 mainly coming in the 2nd half of the year.