NEC, Matsushita and Panasonic Sign Agreement to Establish New Joint Venture for Mobile Handsets

Business Wire, July 27, 2006

TOKYO -- NEC Corporation ("NEC"), Matsushita Electric Industrial Co., Ltd. ("Matsushita") and Panasonic Mobile Communications Co., Ltd. ("Panasonic Mobile") announced today the signing of a memorandum of understanding on the establishment of a development company for mobile handsets. The new company will contract development of mobile handsets and a common software and hardware platform.

Through this joint venture, the three companies intend to reinforce existing collaboration between NEC and Panasonic Mobile. The development of common middleware, applications, and hardware platform will enable the companies to avoid duplication of development efforts, leading to greater efficiency and enhanced development capabilities, and a reduction in both fixed and variable costs. This will equip NEC and Panasonic Mobile with a solid technology platform to stay at the top of innovation in functionality and communication speed as the industry moves to 3.5G and 3.9G technologies towards 2010, while simultaneously focusing resources on differentiation.

The three companies intend to establish this joint venture early October, 2006. The company will be capitalized at 100 million yen with an equal ownership between NEC and Panasonic Mobile.

The following are its main business.

    --  Planning and development of a common software platform

    --  Planning and development of a common hardware platform

        --  Design and evaluation of a common application CPU and
            integrated system LSI

        --  Sourcing, design and evaluation of key devices

        --  Design and manufacturing of an evaluation board

    --  Joint development of mobile handsets (based on the above
        platform)

Through this joint venture, NEC and Panasonic Mobile expect to create synergies by combining NEC's expertise in communications and computer technologies and Panasonic Group's strength in consumer electronics and audio visual products.

NEC and Panasonic Mobile will respectively handle product planning, product development, procurement and manufacturing, as well as sales of handsets bearing their respective brand names "NEC" and "Panasonic".

NEC, Matsushita and Panasonic Mobile started collaboration on the development of mobile phones in August 2001. This effort has led to the successful shipment of NTT Docomo's FOMA(R) mobile phones in November 2004, which incorporates a Linux(TM) based middleware platform jointly developed by NTT Docomo, NEC, and Panasonic Mobile.

Outline of the business scheme

(GRAPHIC OMITTED)

Outline of the New Company (Tentative)

Company name:          To be decided

Headquarters:          Tsuzuki ku, Yokohama City, Kanagawa Prefecture

Date of establishment: Early October, 2006

Main Business:         Development of a common hardware and a software
                       platform for mobile handsets and joint
                       development of mobile handsets

Capital:               100.0 million yen

Ownership:             NEC Corporation (50%)
                       Panasonic Mobile Communications Co., Ltd. (50%)

Employees:             Approximately 140

Management structure:  To be decided (President, Vice president,
                       and 2 board members)
                       At the time of establishment, the president
                       will be appointed from NEC and the vice
                       president from Panasonic Mobile.

About NEC

NEC Corporation (NASDAQ: NIPNY) is one of the world's leading providers of Internet, broadband network and enterprise business solutions dedicated to meeting the specialized needs of its diverse and global base of customers. NEC delivers tailored solutions in the key fields of computer, networking and electron devices, by integrating its technical strengths in IT and Networks, and by providing advanced semiconductor solutions through NEC Electronics Corporation. The NEC Group employs more than 150,000 people worldwide and had net sales of approximately 4,825 billion yen (approx. $41.2 billion) in the fiscal year ended March 2006.

For additional information, please visit the NEC home page at: http://www.nec.com

* Newsroom: http://www.nec.co.jp/press/en/

About Matsushita Electric Industrial Co., Ltd. (Panasonic)

Best known by its Panasonic brand name, Matsushita Electric Industrial Co., Ltd. is a worldwide leader in the development and manufacture of electronic products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated net sales of US$76.02 billion for the year ended March 31, 2006. The company's shares are listed on the Tokyo, Osaka, Nagoya, New York (NYSE:MC), and Frankfurt* stock exchanges. For more information on the company and the Panasonic brand, visit the company's website at http://panasonic.net.

* Matsushita delisted its shares from the Amsterdam Stock Exchange in June 2006, and plans to complete delisting procedures for the Frankfurt Stock Exchange in August 2006.

About Panasonic Mobile Communications