TOKYO -- NEC Electronics Corp., a semiconductor spin-off of NEC Corp., listed its stock on the Tokyo Stock Exchange with a first-day price on Wednesday (July 23) ending at 5,340 yen (about $45), about $10 higher per share than previously planned.
"We appreciate the high valuation on the market," said Kaoru Tosaka, president of NEC Electronics.Going public was the first goal for NEC Electronics since its establishment on November 2002.
"The share price was lower than expected," said Satoru Oyama, senior vice president of Lehman Brothers Japan Inc. "If compared with sales, profit-earning ratio, products, etc. to companies like TI and ST Microelectronics as the benchmark, the share price of NEC Electronics was too low."
The second-day share price was at 5,600, or just over $47.
While NEC Corp. will retain 70 percent of the aggregated 123.5 million shares, 37 million shares were offered, of which 15.3 million were offered to international investors.
On the day of the IPO, NEC Electronics announced its business guidance for the coming fiscal year ending next March. Consolidated sales were projected to drop 2.8 percent down from this year to 705 billion yen (nearly $6 billion). Since sales include resale of LCD and plasma displays, semiconductor sales alone are projected to increase by more than 3 percent from 652.6 billion ($5.53 billion) last year to about 676 billion (about $5.73 billion) this fiscal year.
Both income before tax and the net income are projected to improve significantly. Income before taxes are projected to nearly triple from 15 billion yen ($128 million) last year to 44 billion yen ($373 million). Net income is expecyed to reach 26 billion ($220 million).
The company plans to to invest 82 billion ($695 million)this year to expand manufacturing, a 34 percent increase. "We are going to invest on growing domains. We'll expand the Yamagata and Kyushu fabs," said Tosaka.
Devices for cellular phones and digital AV systems are the main products fabricated at NEC Yamagata and NEC Kyushu. NEC Electronics does not yet have a 300-mm fab, and Tosaka said, "we have not found system-on-chip applications that justify the need of a 300-mm fab. As a matter of course, we are considering various possibilities including a joint fab.
There is word here that major semiconductor manufacturers in Japan are moving to hammer out a plan to build a joint fab or fabs that operate on technology verified on the Advanced SoC Platform Corp. test line. The joint R&D and test project aims to establish volume production technology at the 90-nm node.