By the business year through March 2006, the companies said they expect annual aerospace-related sales of $890 million (100 billion yen). That would amount to a 7- to 8-percent share of the global market, said Toshiba spokesperson Midori Suzuki.
The companies said their alliance is complementary and vital to survive the increasingly competitive aerospace industry. By combining their strengths, NEC and Toshiba hope to capture a growth market share, particularly in Asia where demand is expected to grow for medium- to small-size satellites, said NEC spokesperson Ken Fukuchi.
Overseas market value is estimated at $27 billion (3 trillion yen) to $35.5 billion (4 trillion yen), the companies said.
"To play on the global stage, we need to enter the commercial satellite market," Toshiba President Tadashi Okamura told a press briefing.
NEC, Japan's second largest satellite maker, has annual sales from its space section of $355.5 million (40 billion yen). Toshiba, the third largest, has annual sales of $177.8 million (20 billion yen). They lag behind industry leader Mitsubishi Electric Corp.
Currently, domestic demand for satellites primarily comes from the public sector, which has little scope for further growth. Both companies said the Japanese space-related market -- valued at $1.8 billion (200 billion yen) to $2.7 billion (300 billion yen) a year, will likely remain flat.
Around 1,200 staff will be employed by the joint venture.
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