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NEC, a leading Japanese technology company, is continuing to implement its transformation strategy. At the end of last month, it announced plans to lay off 30,000 employees in Japan and another 30,000 globally, while also closing several factories. Recently, the company revealed a new partnership with Sumitomo Electric, one of Japan’s largest industrial groups. This collaboration involves integrating NEC's AI and IoT technologies into automotive parts produced by Sumitomo Electric, focusing on both in-vehicle systems and off-board infrastructure. The move is seen as a clear sign that NEC is shifting its focus from hardware to software.
Once a dominant player in the global semiconductor industry, NEC has been undergoing a major transformation over the past three decades. It has gradually exited sectors such as semiconductors, computers, and mobile phones, redirecting its efforts toward software development and AI. According to NEC Global President and CEO Shinno Takashi, the company’s future will be centered entirely on artificial intelligence.
After laying off thousands of employees, NEC is now making a bold push into the car networking market. This strategic shift highlights the company’s growing interest in the rapidly expanding field of connected vehicles.
In 2016, NEC launched the “NEC the WISE†brand, emphasizing its commitment to AI and related technologies. The initiative focuses on providing innovative solutions for social challenges through IoT, big data, and security. By leveraging these technologies, NEC aims to drive corporate transformation and sustainable growth.
The collaboration with Sumitomo Electric involves two main areas. First, the companies are working together on the research and development of next-generation car networking products. Combining Sumitomo Electric’s in-vehicle technology and transportation infrastructure with NEC’s advanced AI, cloud, and safety solutions, they aim to create high-value products for the automotive industry.
Secondly, the partnership includes joint development of high-end automotive software. As vehicle functions become more sophisticated, the role of software in component design is increasing. NEC emphasizes the importance of using AI and IoT to develop secure, cutting-edge solutions for vehicle networking, helping expand the scope of smart transportation.
The global car networking market was valued at approximately 260 billion yuan in 2018, and with the maturing of autonomous driving technology, the automotive sector remains one of the most promising applications for AI. Market research firm TrendForce predicts strong growth in demand for communication and safety systems, including radar, sensors, processors, ADAS systems, and automotive displays. With the introduction of Level 4 autopilot chips and regulatory support for autonomous vehicles, cars are set to become a key application area for emerging technologies like AI and machine learning.
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