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

Tokyo, July 27, 2006 - 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
  • esign 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^® 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

Outline of the New Company (Tentative)

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

Panasonic Mobile Communications Co., Ltd., whose headquarters are based in Yokohama, Japan, is a worldwide leader in the development and manufacture of mobile communications products. As one of the main business domains for Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand digital electronics, Panasonic has been developing cutting edge technologies since its establishment in 1958, including the world's first 3G video handset for the Japanese market in 2001. Panasonic is committed in providing added-value solutions to end-users through its mobile communication products. For more information, please visit www.panasonic.co.jp/pmc/en

Media Contact:

Akiko Shikimori
NEC Corporation
+81-3-3798-6511
a-shikimori@ay.jp.nec.com

Akira Kadota
Matsushita Electric Industrial Co., Ltd.
+81-3-3578-1237
kadota.akira@jp.panasonic.com

Junji Kanegawa
Panasonic Mobile Communications Co., Ltd.
+81-45-939-6455
kanegawa.junji@jp.panasonic.com

Linux is a registered trademark or a trademark of Linus Torvalds in the U.S. and other countries.
"FOMA" is a registered trademark of NTT DoCoMo Inc.