NEC racked up a net loss of 130.8 billion yen (US$1.46 billion) in its third business quarter, versus a far less painful loss of 5.2 billion yen (US$57.9 million) in the year-earlier reporting period. Even worse, the Japan-based company indicated that the rising tide of red ink is far from over.
NEC told investors Friday that the company expects to lose 290 billion yen (US$3.23 billion) for its fiscal year that ends March 31. Previously, the company had been expecting a profit of 15 billion yen ($166.9 million). The company said it will reduce its global workforce by 20,000 jobs, primarily in its chip and LCD units, and exit the LCD panel market entirely in its next business year, which begins in April.
A Niche Player
NEC’s decision to drop out of the LCD market marks the end of an era for one of the technology’s early leaders and innovators, said David Barnes, vice president of strategic analysis at Displaysearch. “But it won’t have much of an impact on the industry as a whole,” Barnes said.
What happened in general is that NEC became less significant as its corporate strategies changed over time, Barnes observed. “The Japanese have become niche players, and NEC typifies that,” Barnes explained. “In terms of large panel displays, NEC’s total market share was less than 0.1 percent in 2008.”
Riddhi Patel, a principal analyst at iSuppli, said NEC’s departure won’t affect the main LCD market categories “in any way, shape or form,” but might have an impact on certain specialty segments — such as medical displays, in which the company holds a eight percent market share. “NEC is a very small player when compared to Samsung, LG Electronics, and the major Taiwanese players,” she said.
Barnes noted that NEC held about a three percent market share last year for…