At the start of 2026, Japan’s tech industry was rocked again: NEC has officially announced it will cease all R&D on 4G and 5G wireless base stations. NEC President Takayuki Morita told Nikkei Asia, “The company will, in principle, no longer invest in 4G or 5G wireless access equipment,” shifting focus to higher-margin software solutions and defense systems.
This move follows the collapse of over ¥64.4 billion in government support since 2020. Five years ago, NEC and Japan’s largest telecom operator NTT aimed to capture 20% of the global base station market by 2030, challenging Huawei, Ericsson, and Nokia. Yet, according to Omdia, by the end of 2025, nearly 80% of the global base station market was dominated by Huawei, Ericsson, and Nokia, while NEC and Fujitsu combined held less than 2%. Japan had effectively lost its window to participate in next-generation 5G infrastructure.
NEC’s failure was not sudden. Its long-standing vertically integrated, closed-loop R&D model caused lengthy development cycles and inflexible supply chains, unable to respond swiftly to market demands. The Japanese government’s bet on Open RAN technology also faltered—compatibility, latency, and power consumption issues remained unresolved. Meanwhile, Huawei, Ericsson, and Nokia had already deployed millions of 5G sites worldwide.
Korean media bluntly declared Japan’s high-tech sector “entirely collapsed,” from communication equipment to consumer electronics. In contrast, Samsung and LG had integrated global technologies and leveraged AI and semiconductor co-development. Emerging markets such as India, Vietnam, and Indonesia have risen, accelerating Japan’s marginalization as Asia’s former tech leader.
Following its 5G hardware exit, NEC will pivot to software services and defense systems, relying on government contracts. However, lacking experience in commercial telecom, NEC’s success in defense remains uncertain.
NEC’s farewell to 5G is not just a corporate retreat—it marks the collapse of Japan’s tech nation myth, as a once-confident telecom power is overtaken by global market realities.
