NEC Aims to Double Supercomputer Share by 2014 on Europe Sales

The NEC Corp. SX9 computer
The NEC Corp. SX9 computer is shown in this undated handout photograph. Source: NEC Corp. via Bloomberg

NEC Corp. aims to double its share of the world’s supercomputer market in the next four years by increasing sales in Europe, a market where industry leaders International Business Machines Corp. and Hewlett-Packard Co. may be easier to challenge.

Japan’s largest personal computer maker will increase to 5 percent its share of the supercomputer market it forecasts will reach $14.6 billion by 2014, Fumihiko Hisamitsu, general manager of NEC’s high-performance computing division, said in an interview at the company’s Tokyo headquarters on July 5.

NEC’s plan to expand in Europe mirrors a strategy announced this year by Japanese rival Fujitsu Ltd., which in May said it aims to tap rising demand in Germany, France and the U.K. to increase its market share to 10 percent from 2.2 percent in the next 5 years. U.S.-based IBM and HP control about 80 percent of the market, according to supercomputer-ranking website Top500.

“The barrier to entry in Europe is lower than in the U.S., where there’s a ‘buy American’ mentality,” Hisamitsu said. “There’s a potential for us to grow our business there.”

While supercomputers that fill entire buildings are still mainly found in military and research labs, smaller systems are used by companies to design cars, test drugs and do other tasks that require massive calculating power. The world market for high performance computers, including machines that cluster standard servers, will expand 10 percent annually through 2014, Hisamitsu said.

Break Even

NEC, which took the world record for computer speed with its Earth Simulator in 2002, estimates its supercomputer division will break even this fiscal year on sales of between 20 billion yen ($229 million) and 30 billion yen. Overall, the company is forecasting net income of 15 billion yen in the 12 months through March 2011 on sales of 3.3 trillion yen.

The computer maker’s shares have fallen 2.9 percent this year on the Tokyo Stock Exchange, compared with a 12 percent slide in the benchmark Nikkei 225 Stock Average. The stock dropped 2.1 percent to close yesterday at 232 yen.

Fujitsu is building what it says will be the world’s fastest computer when completed in 2012 at Japan’s Institute of Physical and Chemical Research near Osaka. The machine, the size of half a soccer field, will string together 80,000 processers and be able to perform 10 quadrillion calculations in a second, more than four times as many as the current record holder, a computer called ‘Jaguar’ built by Cray Inc. and housed at the Oak Ridge National Laboratory in Tennessee.

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