NEC has discontinued development of its own quantum computers, marking a significant change in strategy for one of Japan’s early participants in quantum computing research. The company is not leaving the quantum field entirely, however, and plans to continue research into related technologies and practical applications.
The decision, reported in Japan, reflects one of the central challenges facing the quantum-computing industry: turning advanced research into commercially viable hardware remains a long and expensive process. NEC reportedly ended its development of physical quantum-computing hardware at the end of its fiscal year in March 2026, while continuing research and customer-oriented proof-of-concept activities.
For Japan’s technology industry, the move offers a reminder that leadership in quantum computing may depend not only on building quantum processors, but also on finding commercially useful applications around the technology.
NEC Changes Its Quantum Strategy
NEC has been involved in quantum research for decades and was among the early companies working on superconducting qubit technology. The company has also worked with research institutions on quantum computing technologies and applications.
The decision to stop developing its own quantum computer hardware appears to reflect the difficulty of achieving commercial returns within a reasonable timeframe.
Quantum computers require highly specialized hardware, sophisticated control systems and significant research investment. Building systems that can reliably operate at useful scales remains a major engineering challenge.
Rather than continuing to invest directly in the development of a physical quantum computer, NEC is expected to concentrate on research related to quantum technologies and their industrial applications.
That distinction is important. NEC’s decision does not represent a complete withdrawal from quantum technology. The company continues to evaluate practical applications and industrialization opportunities, including proof-of-concept projects with customers.
A Reality Check for Japan’s Quantum Industry
NEC’s move comes as Japan continues to invest heavily in quantum technology.
The country has identified quantum computing, communications, sensing and related technologies as strategic areas for long-term research and industrial development. Japanese companies including Fujitsu, Toshiba and others continue to work on different aspects of the quantum ecosystem.
This makes NEC’s decision particularly noteworthy. It demonstrates that companies can support the development of a national quantum ecosystem without necessarily building every component themselves.
For large technology companies, focusing on applications, software, cloud access, cybersecurity or integration could potentially provide a clearer commercial path than competing directly in quantum hardware.
Fujitsu Takes a Different Approach
The contrast with Fujitsu is also significant. Fujitsu continues to invest in superconducting quantum computing and has set ambitious targets for expanding the number of qubits in its systems.
Different strategies could ultimately benefit Japan’s technology sector.
Competition among hardware developers can advance processor technology, while companies focusing on applications can help determine where quantum computing can deliver measurable business value.
The most important question for enterprises may therefore not be which company builds the largest quantum computer, but which problems quantum technology can solve better than conventional computing.
Opportunities Beyond Quantum Hardware
NEC’s strategy could also highlight opportunities in areas surrounding quantum computing.
Quantum software, hybrid quantum-classical computing, optimization services, quantum networking, simulation and cybersecurity could become important parts of the wider market.
Cybersecurity is particularly relevant. Future large-scale quantum computers could threaten some of today’s widely used public-key cryptography, encouraging organizations to prepare for post-quantum cryptography before quantum systems become capable of breaking existing protections. The G7 has recently emphasized the need for organizations to begin preparing for this transition.
For Japanese businesses, this means quantum readiness does not necessarily require purchasing a quantum computer. Companies can begin by examining their cryptographic infrastructure, identifying vulnerable systems and preparing migration strategies.
What It Means for Japan’s Deep-Tech Sector
NEC’s decision may initially appear negative for Japan’s quantum ambitions, but it could also encourage a more commercially focused approach.
Japan’s deep-tech industry has traditionally benefited from long-term research conducted by large corporations, universities and government-backed programs. The challenge is converting that research into sustainable businesses.
NEC’s continued interest in quantum applications suggests that the next phase of the market could shift toward practical use cases rather than hardware development alone.
Also Read: AI Data Center Power Demand: How Enterprises Are Rethinking Energy, Grid Capacity, and Compute
For Japanese businesses, the message is equally important: quantum computing remains a long-term technology, and companies should distinguish between research potential and near-term commercial value.
NEC stepping back from quantum-computer hardware does not mean Japan is stepping back from quantum technology. Instead, it illustrates how the country’s technology companies are experimenting with different paths toward commercialization.
As quantum computing develops, Japan’s competitive position may ultimately depend on the strength of its entire ecosystem — from hardware and materials to software, cybersecurity, research and industry applications.


