NEC spins off non-DRAM IC business

NEC announced it is spinning off all of its non-DRAM semiconductor business

into a new independent chipmaker as part of a major restructuring at the

company. The new unit will have annual sales of $5.5 billion and have 25,000

workers.

NEC president Koji Nishigaki said NEC will initially hold a 100 percent stake

in the company to be launched on November 1. Later on NEC plans an initial

public offering to sell about 30 percent of the unit's stock. NEC's DRAM

business is already being combined with those from Hitachi in a new joint

venture called Elpida Memory.

The spin represents the latest in a series of major reorganization moves

after NEC had a disastrous fiscal year losing $2.46 billion.