The NEC crown fits well on the head of Sasaki

The NEC crown fits well on the head of SasakiThe employees of NEC are looking forward to working under the new chairman Dr Hajime Sasaki, and they have good reason to, says David Manners
The ideal boss of a high-tech company, is one who understands the business he’s in, sees customers, supports ambitious initiatives and projects a great company image on the international stage.
The three founders of Intel did all of that and most presidents of US companies try to emulate them. Akio Morita of Sony was another, but he was an exception in Japan.
That’s why there’s a feeling of optimism among the employees of NEC about their new chairman who took over on March 26th.  
  Dr Hajime Sasaki… “My target is to be global, to be agile and to be fast-moving. We should be more transparent both internally and externally.”
Dr Hajime Sasaki, formerly head of the semiconductor division, is the kind of boss who cheers his salesmen by making customer visits, who thinks the unthinkable, supports the entrepreneurial and who understands the key technologies on which NEC’s businesses in communications, components and computers are based.
Sasaki, a tall patrician figure whose father was Governor of the Bank of Japan, is a leading figure in the international semiconductor industry having given the keynote at the International Solid State Circuits Conference (ISSCC) and having been appointed a Fellow of the US Institute of Electrical and Electronic Engineers (IEEE).
He has been the most successful of all the heads of Japanese semiconductor companies, taking NEC to No.2 in the worldwide semiconductor industry with revenues of $8bn last year, $2bn more than its nearest Japanese rival.
“My target is to be global, to be agile and to be fast-moving”, said Sasaki, “we should be more transparent both internally and externally. The New NEC is focused on global competition. Frankly speaking, in the past, NEC had a couple of business areas which were highly dependent on the local market. Now, overseas competitors are coming into the local market – like Compaq and Dell in PCs which competed against NEC’s 9000 series. We need to be a global player competing with overseas competitors in both the domestic and overseas markets”.
That NEC will move boldly under Sasaki’s chairmanship can be judged from his reaction to the prospective alternative operating system to Windows -Linux.
“The Wintel world used to be untouchable but now a new era is coming. The opportunity for change is Linux. If it becomes mainstream then the basis for competition in the microprocessor market becomes cost/performance not architecture,” said Sasaki.
Asked if NEC would take advantage of the opportunity by seeking to establish its own proprietary microprocessor architecture Sasaki replied: “That would be difficult, but we have a strong background in the MIPS architecture.”
MIPS would be the first priority”.
When in charge of NEC’s semiconductor business, Sasaki funded a group of renegade Silicon Graphics designers to start up their own MIPS design house in Silicon Valley called Sandcraft. Sandcraft has done some MIPS designs for NEC for use in Nintendo games machines. Now they could be doing them for PCs.
Whether or not the opportunity provided by Linux is there “depends on the applications software”, said Sasaki. If this becomes available then PC makers may support Linux just as IBM and HP have supported Linux in servers.
“It all depends on our customers’ decision,” said Sasaki, “up to now we have had no way to tell. But now we have a chance.”
With its commanding lead over its Japanese rivals, NEC is now seen as the only one of the Japanese majors who will continue to play a world role in commodity DRAMs.
NEC is emerging as one of a Big Four in worldwide DRAM manufacturing – along with Samsung, Micron and LG/Hyundai – who may share some 70 per cent of the world’s DRAM capacity between them.
“During 1998, most of the Japanese DRAM players decided to go out from this business. It is true that at this time we see ourselves as staying in it. The battle is between the big giants”, says Sasaki, “NEC is staying in because our customers are asking us to.”
The barometer of future intentions in the semiconductor industry is capital investment. The cut-backs in investment by the semiconductor majors in 1998/9 shows the commitment to DRAM of the companies.
Whereas Hitachi cut semiconductor capital spending by 83%, Fujitsu by 54%, Mitsubishi by 50 per cent and Toshiba by 29 per cent, NEC only cut by 16 per cent.
So the capacity of Sasaki’s domestic DRAM rivals to produce advanced DRAM will be well down in 2000/2001 and, if they don’t find a product to replace it, they are going to find it hard to regain the ability to make the capital investments which are essential to future competitiveness in semiconductors.
It looks as if NEC will be the first Japanese company to manufacture on twelve inch wafers. “Frankly speaking, Japanese companies are conservative about capital investment in new wafer fabs. This year we will ramp up our Shanghai fab and in the year 2000 we will ramp up our Yamagata wafer fab – both of which are 200mm. Our next new fab – starting in 2001 – will be 300mm. We haven’t decided yet where it will be but, because of the availability of floorspace it may be Kyushu,” said Sasaki.
Placed as he is, it is perhaps not surprising that Sasaki is more optimistic than his Japanese rivals about this year. “1999 will be a strong year”, he said, “from now on I see ten to fifteen per cent annual growth”.

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