Hitachi, NEC Form Switch Venture

Hitachi Ltd. and NEC Corp. said Thursday that the two companies have established a joint venture specializing in the production of routers and switches.

The joint venture, Alaxala Networks Corp., based in Kawasaki, Japan, specializes in the sale of backbone products to telecommunications carriers. Alaxalas formation follows the signing of a memorandum of understanding by Hitachi and NEC on June 25. Hitachi owns 60 percent of the company.

On Thursday, Alaxala began selling its AX series backbone router/switch to its business partners. Both Hitachi and NEC will strongly promote the system integration of their own networking equipment and servers with those from the joint venture, the company said.

“Under the recent expansion of the broadband network market, there are emerging business opportunities in establishing new Internet Protocol network service infrastructure among telecom operators and service providers,” Alaxala said in a statement. “The trend is also seen on a global scale. IP network is becoming one of the most important social infrastructures as well as the indispensable business infrastructure for corporate/business activities in the information society.”

Alaxala will be led by Hiroyuki Wada, who formerly served as general manager for the Information Communications Group inside Hitachis IP Network Division. The companys estimated on-hand capital is 11 billion yen, or $99.7 million.

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