Why NEC plans to stop building quantum computers

NEC is separating quantum research from computer development

NEC reportedly plans to end its quantum-computer development program while continuing quantum research, according to Japanese news publication The Mainichi. The Japanese IT services company is separating its research activity from the commitment to produce a usable computer. Its reported decision reflects two connected concerns: how long development would take and how difficult it would be to earn revenue from the technology.

A lengthy development period complicates NEC’s investment case

The time needed to build a useful machine is central to that decision. Unnamed NEC sources told The Mainichi that developing a quantum computer suitable for practical use would take at least a decade. NEC executives have separately put practical, commercial quantum computing more than a decade away. Their assessment makes the development commitment a long-term one, with practical use still years beyond the company’s current work.

Revenue poses another problem: NEC sources also expect difficulty monetizing the technology, meaning turning it into a business that earns money. The reported investment concern therefore reaches beyond completing the machine to finding a commercial return. Together, the expected development period and difficulty earning revenue explain why NEC is stepping away from computer development while retaining research.

The decision reverses NEC’s earlier plans to invest more. According to The Mainichi, three years earlier, the company was discussing its quantum advances and plans to accelerate investment in the technology. Its reported withdrawal changes that direction: NEC will continue investigating quantum technology, but it is ending the program intended to produce a computer.

NEC’s competitive position shapes its decision

The investment case also depends on where NEC stands among other developers. Despite early successes in quantum technology, NEC now trails Japanese competitors Fujitsu and Hitachi in recent advances, The Mainichi reports. Its earlier achievements therefore sit alongside a more difficult current competitive position. NEC is making its decision while other Japanese companies have moved ahead.

Other technology companies are also pursuing a stronger position in the field. Nvidia and IBM are both seeking to strengthen their quantum credentials, placing NEC’s retreat from development against continued corporate interest elsewhere. Their ambitions show why NEC’s decision runs against the wider enthusiasm for quantum computing, even as the time and spending required weigh on its own plans.

Scientific recognition and public funding operate on different terms

That corporate interest accompanies strong scientific recognition for quantum computing, which remains a leading research field. Pioneers in the field received the Nobel Prize in Physics last year. NEC’s decision comes amid that recognition: the company is retaining research while stepping back from the work needed to build a practical machine.

Government investment adds another dimension to the spending decision. Japan is set to commit 10 trillion yen ($65.3 billion) to quantum computing by 2040, according to The Mainichi. Yet that planned commitment is substantially below the sums invested by the US and China. The scale of international spending makes the investment required another consideration alongside NEC’s expected development time and difficulty generating revenue.

Those commitments extend over a period in which quantum technology remains far from widespread use. Although the field has attracted attention for years, bringing the technology into everyday use is still a distant prospect. NEC may therefore be followed by other companies that decide the investment required is too high.

Key takeaways for leaders

Separate research from product development: NEC reportedly plans to end quantum-computer development while retaining research. R&D portfolio owners can assess these commitments separately, preserving scientific work while reviewing the cost of building a commercial machine.
Test the commercial investment case: NEC sources expect practical quantum computers to take at least a decade to develop, with revenue also uncertain. Investment reviews need to account for both technical delivery timelines and a credible path to commercial returns.
Factor in competitive position: NEC’s reported retreat follows advances by Japanese rivals Fujitsu and Hitachi. Quantum investment decisions need to weigh the company’s current capabilities alongside the funding and time required to compete.
Assess public funding separately: Japan’s planned quantum investment extends to 2040, while NEC is reassessing its own development commitment. Corporate funding decisions need company-specific milestones and return assumptions, even when government support and scientific recognition remain strong.