NEC Corporation

Face recognition 'face pass' services are gradually expanding at station ticket gates, supermarket payments, and baseball games. Trial Holdings has introduced a payment service using NEC's face recognition technology at 15 stores in Tokyo and Fukuoka Prefecture, and at Yomiuri Giants games at Tokyo Dome, face pass entry and hands-free payment at some shops using Panasonic Connect technology have become possible. Hitachi and Tobu Railway have introduced face recognition ticket gates at Ikebukuro Station on the Tobu Tojo Line and plan to make them usable for payments at nearby commercial facilities. Panasonic Connect evangelist Kunio Furuta expects the face recognition market to grow from 55.7 billion yen last year to around 130 billion yen by 2030. Meanwhile, the ID Authentication Technology Promotion Association has pointed out concerns about tracking user behavior and is urging businesses to operate carefully to avoid privacy violations.

NEC achieved a sharp profit increase in the first quarter of fiscal 2027, with net profit up 157.4% year on year to 49.7 billion yen. Revenue rose 14.5% to 819.7 billion yen, while operating profit climbed 66.1% to 58.7 billion yen, meaning profit growth far outpaced revenue growth. For the full year, the company expects revenue to decline but profit to rise, forecasting revenue of 3.54 trillion yen, operating profit of 430 billion yen, and net profit of 290 billion yen. The share price surged after the earnings announcement, reaching 5,168 yen on August 14, up about 20% over the past month.

Japan's local 5G market is forecast to generate close to $1.1 billion in cumulative investment by 2030, with annual spending growing at a compound annual growth rate of approximately 55% between 2026 and 2030. The new Japan Local 5G Market 2026-2030 report from ResearchAndMarkets.com highlights rapid commercial maturity across industrial and enterprise sectors, driven by deployments from NTT DATA, Fujitsu, and NEC. Growth is expected to be led by locally licensed 5G networks operating in Band n79 at 4.6-4.9 GHz and Band n257 at 28.2-29.1 GHz, supporting digital transformation across manufacturing, transportation, construction, utilities, broadcasting, agriculture, public safety, and disaster preparedness. High-profile deployments include the Port of Osaka's Yumeshima Container Terminal, Hiroshima Gas, NEC Corporation, and Ricoh's Tohoku Plant. The research package includes the complete Private 5G Market 2026-2030 report and a dedicated datasheet with local 5G market size forecasts for Japan.

Nvidia has signed seven Japanese industrial giants into its new physical AI coalition, locking in a massive, long-lived stream of demand for its chips and software. Companies including Fujitsu, FANUC, Yaskawa Electric, Kawasaki Heavy Industries, Hitachi, NEC, SoftBank, Sony, and Kubota intend to build on Nvidia's Cosmos, Isaac, Metropolis, and Jetson platforms as part of a Cosmos Coalition focused on physical AI. Nvidia is also partnering with Noetra, a Japanese AI consortium backed by Sony, SoftBank, Honda, and dozens of other firms, to build what it calls the world's first national infrastructure for physical AI, centered on a Vera Rubin AI factory with 13,750 Vera CPUs and 27,500 Rubin GPUs delivering about 140 megawatts of compute capacity. Japan's industry ministry expects this to help the country capture 30% of the global AI robotics market by 2040, and Prime Minister Sanae Takaichi's government plans to mobilize more than 370 trillion yen, or 2.3 trillion dollars, in combined public and private investment by 2040 across physical AI, semiconductors, and data centers. Noetra's own roadmap calls for roughly 1 trillion yen, or 6.3 billion dollars, of sovereign AI spending over five years to develop domestic foundation models for robots and industrial AI.

NEC shares surged on July 30, reaching 5,002 yen. For the first quarter of the fiscal year ending March 2027, net profit improved dramatically to 49.7 billion yen, up 157.4 percent year-on-year, while revenue rose 14.5 percent to 819.8 billion yen and operating profit climbed 66.1 percent to 58.8 billion yen. The operating profit margin has risen from around 4 percent five quarters ago to 10 percent in the previous quarter, and return on equity reached 13.0 percent, exceeding the electrical equipment sector median of 7.4 percent. The disposal of low-margin businesses and a shift toward IT services and social infrastructure are contributing to improved profitability, and the market may be starting to appreciate this transformation.

Hitachi, NEC, and Advantest have raised their full-year earnings forecasts following strong first-quarter results for the fiscal year ending March 2027. Advantest lifted its full-year operating profit forecast from 627.5 billion yen to 846 billion yen, and also significantly raised its outlook for the semiconductor tester market. NEC increased its full-year non-GAAP operating profit forecast from 420 billion yen to 430 billion yen, helped by improved profitability in IT services and aerospace and defense. Hitachi raised its full-year adjusted operating profit forecast from 1.315 trillion yen to 1.408 trillion yen, driven by its energy business and demand for AI transformation.

Japan's government-led domestic physical AI development plan, FRONTia, has officially launched, and Hirotoki Tamba, president of the newly established company Noetra tasked with developing the foundation model, told Reuters in an interview that this field represents a last chance for Japan. The Ministry of Economy, Trade and Industry held a kickoff event on the 16th, where Prime Minister Sanae Takaichi emphasized physical AI as Japan's path to victory, unveiling a vision to deploy 10 million AI robots across 18 sectors by 2040. Noetra was founded with SoftBank, NEC, Honda, and Sony Group as its core members, and currently has a total of 44 investors including megabanks. It has received a five-year project commission from government-affiliated institutions and will spend approximately 380 billion yen in the first year. Tamba pointed out the difficulty of physical AI that utilizes field data, while stressing the significance of a transparent and secure domestic foundation model that companies can manage by combining with their own data. He also revealed plans to procure around 27,500 Rubin AI semiconductors from US-based Nvidia.

Nvidia is collaborating with leading Japanese robotics companies FANUC, Yaskawa Electric, and Kawasaki Heavy Industries, along with Fujitsu, to develop AI solutions for robots and industrial systems using Nvidia platforms such as Cosmos, Isaac, Metropolis, and Jetson. Additionally, other companies like Hitachi, Kubota, NEC, Sony, and SoftBank Corp. are set to join the NVIDIA Cosmos Coalition to develop real-world AI models. Meanwhile, Noetra, backed by the Japanese government with Sony as an investor, plans to purchase 27,500 NVIDIA Rubin GPUs to build physical AI infrastructure, with construction expected to start in April 2027 and operations to begin in 2028. Analysts view this partnership as a positive factor reflecting Nvidia's market expansion from AI data centers to physical AI and robotics. While it may not significantly impact short-term revenue, it creates a new long-term AI market.

Nvidia is set to supply Japan with 27,500 next-generation Rubin AI chips as the country builds a homegrown foundation model focused on robotics. The project will be led by newly formed Noetra Corp., which received 387.3 billion yen, or about $2.4 billion, in government funding to build a large-scale data center by March 2027. SoftBank, Toyota-backed Preferred Networks, and NEC are helping develop and operate the venture. Japan wants the project to reduce dependence on U.S. and Chinese AI systems while building on its strength in industrial robotics, with Noetra planning to release its first model by March 2027 followed by regular updates and a robotics-focused system later.

Nvidia CEO Jensen Huang unveiled a broad slate of AI products, partnerships, and customer deployments at the company's Japan AI event in Tokyo on July 15. The announcements spanned physical AI, healthcare, financial services, quantum computing, automotive, manufacturing, and gaming, highlighting Nvidia's push to position its technologies at the forefront of Japan's next-generation AI infrastructure. In physical AI and robotics, Nvidia launched Cosmos 3 Edge for on-device vision reasoning, and companies including FANUC, Fujitsu, Hitachi, Kawasaki Heavy Industries, Kubota, NEC, SoftBank, Sony Group, and Yaskawa Electric plan to join the Nvidia Cosmos Coalition to develop open physical AI models. In healthcare, Astellas Pharma, Eisai, Daiichi Sankyo, Ono Pharmaceutical, and Takeda Pharmaceutical are deploying Nvidia BioNeMo for AI-powered drug discovery, while Canon and Fujifilm introduced Nvidia-powered next-generation CT systems, and Kawasaki Heavy Industries is advancing AI-enabled surgical and hospital robots. In financial services, Mizuho Financial plans Japan's largest on-premises AI factory for banking, Sumitomo Mitsui Financial has deployed an AI factory through Japan Research Institute, and Rakuten Bank is developing AI transaction foundation models using Nvidia Agent Toolkit. Huang emphasized that the next wave of AI will be physical AI—robots, factories, vehicles, and industrial systems that can perceive, reason, and act in the real world—and said Japan's leadership in robotics, manufacturing, and precision engineering positions it to play a leading role in this transition.

NEC has signed a memorandum of understanding with Ava Labs to begin joint exploration of next-generation on-chain services leveraging the Avalanche blockchain. The initiative aims to build a digital transaction platform that integrates NEC's biometric-based decentralized identifiers and verifiable digital credentials with the Avalanche infrastructure, unifying identity verification, stablecoin payments, and reward distribution. As a first step, a white paper targeting foreign visitors to Japan has been released, presenting a model where users obtain a FaceVC linked to facial recognition before arriving in Japan, and after arrival, complete instant stablecoin payments and receive rewards tailored to traveler attributes through a single tap approval with facial recognition at stores. The system employs three Avalanche chains with distinct roles: a permissioned Avalanche L1 manages DID documents and VC revocation information, the payment-dedicated network SETTL processes stablecoin payments, and the public C-Chain handles issuance and circulation of reward tokens and NFTs, all connected via Interchain Messaging. Going forward, the two companies will also explore expansion into financial institution identity verification, cross-border payments, and AI agent authentication.

A consortium including Microsoft and telecom startup Lightstorm plans to build a new undersea cable linking India with Malaysia and Singapore. The I-2SEA cable, also backed by Tata Communications, Singapore Telecommunications, ASEAN Cableship, and NEC Corporation, will span 3,600 kilometers and support AI, cloud, and hyperscale workloads. Landing stations will be in Machilipatnam, Andhra Pradesh, where Meta and Alphabet have announced data centers. The cable is expected to be operational in the fourth quarter of 2029. Lightstorm Group CEO Amajit Gupta said the company currently connects 19 AI and cloud zones across India through terrestrial fiber and expects the new network to bring that number to 29.

DigitalBridge and Japan Extensive Infrastructure have formed Nippon Gateway Infrastructure, a new colocation data center platform in Japan. NGI launches with a foundational portfolio of data center assets acquired from NEC Corporation, comprising facilities in the Greater Tokyo and Greater Osaka regions. NEC will remain a strategic customer while NGI intends to expand its enterprise platform. Hiroshi Ogasawara has been appointed President and CEO, Masato Hoshino as Executive Vice President and COO, and Yoshiaki Fujimori as Chairman. NGI aims to become a leading enterprise-focused colocation data center platform in Japan, pursuing growth through strategic acquisitions, expansion of existing facilities, and selective greenfield developments.