NEC Corp, which wants to raise money for overseas acquisitions, hired Morgan Stanley Dean Witter & Co to help list its shares on the New York Stock Exchange, Chair-man Hajime Sasaki said.
Tokyo-based NEC, the third-largest chipmaker, will list in New York as early as fall although it won't sell shares immediately, bankers and government officials said.
Chip and computer shares have tumbled as companies such as Intel Corp and Dell Computer Corp said they would miss profit forecasts because of a slowing global economy. Dell's shares lost half their value in the past year while Intel dropped 60 percent.
The NASDAQ Composite Index declined almost 50 percent.
Whether the share sale succeeds "is up to how the US market performs when the shares are sold," said Yuichi Ishida, an anal-yst with Mizuho Investors Securities. "Japanese chip companies overall rank at the lower end of the worldwide chip market" in terms of profitability.
Morgan Stanley will prepare documents for filing with the Securities and Exchange Commission and will recommend to the NYSE that NEC be listed, the bankers said.
The listing will increase NEC's funding options should it decide to increase investments abroad. NEC President Koji Nishigaki, who became head of NEC in March 1999, told reporters in January the company wanted to list shares in New York to use as currency to acquire companies.
"NEC isn't as recognized as a company like Sony Corp by consumers overseas," Toshiya Tsuchikawa, a technology analyst at Shinko Securities Co said. "A NYSE listing would give NEC prestige and value in relation to its competitors worldwide, helping NEC sell more products, including personal computers and mobile phones."
NEC spokesman Makoto Miyakawa declined to comment on the company's plans. Morgan Stanley spokeswoman Sumiko Iwadate also declined to comment.
NEC's shares have fallen 17 percent this year compared with a 15 percent decline for rival Toshiba Corp, Japan's biggest chipmaker, and a 9 percent slide for the 153-member TOPIX Electric Appliances Index.
Nishigaki has said NEC will spend ?600 billion (US$4.8 billion) by March 2003 to acquire companies in the US and Japan for their telecommunications network and chip technologies. He visited New York and London in November to drum up interest for the company's plans. The president also spoke about the listing in May at a meeting with reporters.
"A month ago, Richard Grasso, chairman of the New York Stock Exchange, came to my office and strongly invited us to list on the NYSE," Nishigaki said at the time. "I think doing it will depend on our results for the first half of this year. When we have good enough results, then we will proceed."
NEC's second-half profit slipped 41 percent as the price of computer memory fell below the cost of production. NEC, which is also the fifth-largest personal computer maker, is scrapping production of 64-megabit dynamic random access memory chips this year to focus on products with higher margins.
The spot price of the benchmark PC133 8x16 128-megabit DRAM most recently traded at US$2.30, less than a third the average for the past year.
With PC sales slumping worldwide, computer makers such as Compaq Computer Corp and Dell have scaled back production and tried to reduce inventories. That's creating less need for NEC's chips, including flash memory, computer memory and specialized system chips. Together, they account for about 18 percent of NEC's annual revenue.
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