NEC Electronics to double Blu-ray sales in 2 years

TOKYO (Reuters) - Japan's NEC Electronics Corp 6723.T said on Tuesday it expects to double sales of its Blu-ray products in the next two years by matching steep price falls hitting its clients, manufacturers of DVD players.

NEC Electronics, which competes with Matsushita Electric Industrial Co 6752.T, Broadcom Corp BRCM.O and Sigma Designs Inc SIGM.O, aims to take over half the global Blu-ray chip market by March 2011 from an expected 40 percent at the end of March 2009.

By pushing the world's first chips that pack on a single sliver of silicon signal processors and memory to control graphics, audio and other functions, the NEC Corp 6701.T unit aims to raise sales of its Blu-ray products to 40 billion yen ($378 million) in the year ending March 2011, executives said.

“We’ve gained an edge over our rivals with this chip,” NEC Electronics Associate Vice President Shigeo Niitsu told reporters at a news conference. “We will do what it takes to keep pace with market price falls of 30 percent to 40 percent to keep our lead.”

The February defeat of Toshiba Corp's 6502.T HD-DVD discs in an optical-disc format war against Blu-ray discs championed by Sony Corp 6758.T has cleared the way for Blu-ray suppliers to cash in on the growing home movie market.

But price competition remains stiff as client makers of high-definition DVD players race to cut costs and develop the first players to sell for under $200 -- commonly seen as the threshold to herald a boom in the next-generation home video market.

In Blu-ray drives, NEC Electronics held a 60 percent share of the global market in the year ended March and competes against Matsushita and Renesas, a joint chip venture between Hitachi Ltd 6501.T and Mitsubishi Electric Corp 6503.T.

Shares of NEC Electronics were down 6.8 percent at 2,590 yen at 0354 GMT, against a 2.0 percent fall in the benchmark Nikkei average .N225.

Reporting by Mayumi Negishi; editing by Sophie Hardach