It's a cliche, but change occurs slowly in Japan.
Hajime Sasaki promised to change NEC Electronics Corp. soon after becoming chairman of the company's board of directors. Nine years later, and almost half a century after joining the company in 1961, Sasaki has unveiled the latest tactic in his efforts to reorganize the electronic giant.
By western standards, where shareholders expect corporate reorganizations to begin within weeks of being announced and wind down in a year or so, the slow progress of NEC's decade-long restructuring is mind-boggling. By Japanese standards, though, NEC and Sasaki are on the fast track.
Sasaki's latest move, which brought his Tokyo-based company into a global semiconductor process development alliance with IBM Corp. and other multinational companies is his most daring because it sends the clearest signal yet of the Japanese high-tech sector's willingness to embrace a new operational model.
While the alliance does not rise to the level of a East-West high-tech corporate merger, the move is still significant in that it brings NEC into a partnership with companies as diverse as Toshiba Corp., foundry services provider Chartered Semiconductor Manufacturing Ltd., U.S.-based Freescale Semiconductor Inc., Korea's Samsung Electronics and STMicroelectronics NV.
The partners are responding to the spiraling costs of semiconductor process development, a situation that is forcing the industry's leading chip vendors to forge alliances with competitors as well as OEM customers around the world.
By teaming with Big Blue and the other partners, NEC is acknowledging that it can no longer afford to singlehandedly fund next-generation IC process development, and must share with competitors both the costs and risks.
More fundamentally, however, the company is breaking the shackles of nationalistic pride and identity that had previously propelled Japan to the world's second biggest economy. However, those same strengths have proven to be weaknesses in the current global environment.
Changing Japanese mind-set
NEC is not alone. A new mind-set is taking hold in Japan, one that reflects the realities of a rapidly changing global market where old local alliances have become ineffective and new ones must be forged across international borders and, if necessary, with old and even current rivals.