NEC and Toshiba: unification in space

NEC Corporation and Toshiba Corporation are to unify their space business operations in a joint venture.

NEC and Toshiba are to establish a new joint space business venture in April 2001, and transfer their space operations to it during the following six months. The new joint venture will have an initial capitalisation of seven billion yen, 60% held by NEC and 40% by Toshiba, and its president and CEO will be appointed by NEC. The new company name has yet to be decided.

Its business will extend from consultation on space products and systems to the planning, design, manufacture, integration and testing, sales, operation and servicing of satellites, manned space stations and space systems. This will include onboard equipment for spacecraft as well as ground systems. The new company is expected to achieve sales of 100 billion yen in 2005, five years after it starts business.

Japan’s domestic market for launch vehicles, ground systems, spacecraft and the international space station, while valued at 200 to 300 billion yen a year, is essentially flat, with no growth anticipated in coming years. The government is the main source of orders, and little commercial growth is anticipated. The overseas market is worth three to four trillion yen and has seen numerous large-scale mergers and fast intensifying competition in recent years.

Responding to these circumstances, NEC and Toshiba began the discussions leading to the unification in December 1999. Both companies see unification as a necessary means to improve the competitiveness of their space business and to secure expansion in Japan and overseas.

NEC developed Japan’s first satellite, Osumi, which was launched in 1970. In 1975, the company developed Kiku-1, the National Space Development Agency of Japan’s (NASDA) first engineering test satellite, and since then has provided system integration for the Himawari series of geostationary meteorological satellites and Momo-1, Japan’s first real earth observation satellite. NEC’s transponders and sensors are also used in European and US satellites.

Toshiba entered the space business through its participation in Yuri, the world’s first experimental broadcasting satellite. The company’s subsequent contributions to the business include the development of the large-scale three-axis satellite attitude control and robot arms used in Japan’s experimental module for the international space station. In recent years, Toshiba has also developed the large deployable reflector that is to be integrated into the ETS-VIII engineering test satellite. Toshiba also supplies solar array panels to satellite manufacturers overseas, and is a partner in the SkyBridge plan for satellite-based high-speed communications services.