State May Share in $1-Billion Expansion by Japan’s NEC : Computers: Chip maker considering sites near Sacramento and in Scotland.
California expects to get at least part--if not all--of NEC Corp.’s $1-billion investment in new computer-chip manufacturing facilities, economic development officials said Monday.
The giant Japanese company confirmed that it plans the investment to expand production of 16-megabit dynamic random access memory chips--components of almost all personal computers--and eventually add 64- and 256-megabit chips.
NEC officials say the new production facilities will be built at one or both of the NEC manufacturing plants outside Japan--in Roseville, Calif., near Sacramento, and an older plant in Livingston, Scotland. And California officials are upbeat about the Roseville plant’s prospects.
“From the recent meetings we’ve had (with NEC), we’re confident there will be an expansion at the Roseville facility,” said Bill George, a spokesman for the state’s Trade and Commerce Agency. State officials, including Gov. Pete Wilson, met with NEC executives in Tokyo last November and subsequently in California.
“We knew about the Scotland issue,” George said. “We believe that they may make major investments at both locations, and they are not necessarily in competition with each other.”
Russell Childs, associate vice president of operations at NEC’s Roseville plant, does not expect a decision on the expansion plans until spring. “Our fiscal year ends in March, and I think this will go down to the wire,” he said.
Another California delegation--including the mayor of Roseville--will go to Tokyo in October, according to Al Gianini, executive director of the Sacramento Area Commerce and Trade Organization, the regional economic development agency that has been part of the effort to attract the investment to California.
A $1-billion addition to the Roseville site would double NEC’s investment in the facility.
“The location has not been decided yet,” NEC spokesman Mark Pearce told Reuters news service Monday in Tokyo. “Both governments are trying hard to get the NEC contract.”
Press reports have indicated that a big factor in NEC’s investment strategy would be its assessment of the market potential for chips in Europe and the United States. The firm wants to expand outside Japan to cut manufacturing costs and counter the export disadvantage posed by the strong yen.
California officials declined to discuss the lures they are setting to induce NEC to choose the Roseville site. “I wouldn’t want Scotland to know what we’re doing,” Gianini said.
But George expects the state to benefit from legislative action in 1993 that changes the workers’ compensation system and a variety of business tax provisions.
