Solectron to Make NEC Phones

TOKYO and MILPITAS, Calif. -- NEC Corporation (NEC), a leading provider of Internet, broadband network and mobile Internet solutions, and Solectron Corporation (NYSE:SLR), a leading provider of electronics manufacturing and supply-chain services, today announced an agreement in principle for Solectron to provide manufacturing and after-sales services for NEC's advanced Internet-enabled handsets.

In an expansion of the relationship between the two companies, Solectron would be the outsourced manufacturer of NEC's Third-Generation (3G) mobile terminal products, or handsets, for markets outside of Japan. NEC, which currently produces these products in Japan, plans to gradually transfer production to Solectron's facility in Suzhou, China, after initial pilot production of each new product in Japan.

Under this agreement, NEC's mobile terminal manufacturing capacity outside of Japan would rise to more than 1 million units per month.

Solectron recently began producing the first product covered by this agreement, an NEC 3G handset for wireless service provider Hutchison 3G. The handset's features include video calling, video and photo messaging, video downloading, games and wire-free dial-up networking.

In addition, Solectron recently started providing pan-European repair services for NEC 3G products. The two companies said they would negotiate an expansion of their relationship to include mobile terminal customizations.

"Through this agreement with Solectron, NEC expects to reinforce the total supply chain of NEC's mobile terminals outside Japan," said Susumu Otani, associate senior vice president, head of NEC's mobile terminals business unit. "At NEC, we are using our know-how, competence and leading position in the Japanese 3G and mobile Internet market to rapidly expand our mobile terminal business outside of Japan. To achieve this, it is an important strategy to further strengthen our supply chain with effective manufacturing systems, customization and full maintenance support for end users around the world."

NEC supplies advanced mobile Internet terminals worldwide, including the world's first 3G terminals for NTT DoCoMo, J-PHONE and Hutchison 3G's operations, and 2.5G terminals for KPN group (the Netherlands, Belgium and Germany), Bouygues Telecom in France, Telefonica Moviles in Spain, KG Telecom in Taiwan, Telecom Italia Mobile, AT&T Wireless in the United States and for the China market (China Mobile's MMS service). NEC's mobile handsets are known for their prominent technologies, including large color screens, built-in cameras and other functions that make them ideal for mobile Internet use.

"Implementation of this agreement will strengthen our relationship with NEC, one of Solectron's major global customers, as well as expand our consumer-products business," said Chester Lin, executive vice president and president, Solectron Asia/Pacific. "We look forward to utilizing our range of services to help NEC streamline its supply chain and meet the needs of its 3G customers and end users."

Solectron Corp.

NEC Corp.