NEC is realigning its operations in China in an effort to better serve the needs of customers in the region and secure the company's long-term growth.

This business realignment was driven by the company's acquisition of a license from the Chinese government to import and sell semiconductor products designed and manufactured outside of China, pursuant to Decree 8 of the Ministry of Commerce Administrative Measures on the Investment in the Commercial Field by Foreign Investors.

Based on the newly acquired license to import and sell semiconductor products in China, NEC Electronics China will actively pursue sales of NEC Electronics products to customers in the region by working closely with nearby NEC Electronics Hong Kong and NEC Electronics Shanghai, as well as through its Beijing headquarters and other offices.

Beijing NEC IC Design Company will become the flagship site for NEC Electronics in China, and the company will re-launch operations under the new name "NEC Electronics China". The company will continue to be headed by Fumiaki Urase, current president of Beijing NEC IC Design Company.

NEC Electronics has a long and rich legacy of serving customers in China, starting with the establishment of SGNEC in 1991. Beijing NEC IC Design Company was established in 1998, followed by NEC Electronics Shanghai in 2001.

However, despite having a physical presence in China, opportunities for business in the region remained limited because of restrictions for foreign companies on the import of semiconductor products developed and manufactured

outside of China. On June 1, 2004, the Chinese government enacted Decree 8 of the Ministry of Commerce Administrative Measures on the Investment in the Commercial Field by Foreign Investors, which allowed commercial wholly-owned enterprises (WOFE) to apply for licenses starting December 11, 2004. Beijing NEC IC Design Company submitted the application in January 2005, which was approved June 30, 2005.