NEC drops quantum hardware while advancing quantum-secure networks - SDxCentral

– Sundry Photography/Getty Images NEC has stopped developing quantum computer hardware after concluding that commercialization would take too long to deliver an adequate return on investment.Per Nikkei Asia, the Japanese technology company ended development of physical quantum computing systems at the end of March. It will instead concentrate on related technologies and services, including quantum-inspired computing performed on conventional hardware.The decision marks a retreat from a field NEC helped establish, but not a complete withdrawal from quantum technology. The company has made no corresponding announcement about its quantum networking and security programs.NEC has conducted quantum cryptography research for more than 20 years, developing quantum key distribution (QKD) systems using both the BB84 and continuous-variable protocols. QKD uses the quantum properties of light to distribute encryption keys while revealing interception attempts, with the BB84 method encoding quantum keys into single photons using discrete properties like polarization, while continuous-variable protocols encode information into the continuous properties of amplitude and phase.In a 2025 demonstration with Toshiba and Japan’s National Institute of Information and Communications Technology, NEC tested QKD over infrastructure designed to resemble a telecommunications carrier’s optical backbone.The researchers transmitted QKD signals alongside conventional data traffic over 25 miles of fiber. The link carried simulated traffic equivalent to 47.2 Tb/s, while data signals at 400 Gb/s and 800 Gb/s per wavelength were transmitted without errors. Two QKD systems simultaneously generated encryption keys over eight hours.The test used NEC’s SpectralWave WX optical transport equipment and a reconfigurable optical add/drop multiplexer compatible with the Innovative Optical and Wireless Network's all-photonic network (APN) architecture.QKD networks have traditionally required dedicated dark fiber because ordinary data signals can interfere with much weaker quantum signals. Demonstrating that the two can share infrastructure could reduce the cost and complexity of introducing quantum-secured communications to existing carrier networks.NEC has also supplied QKD technology for financial transaction tests. In 2024, its equipment supported a demonstration in which quantum tokens were issued and redeemed over six miles of fiber in an environment simulating banks, branches, and customers.Its quantum computer hardware had progressed less far. NEC and Japan’s National Institute of Advanced Industrial Science and Technology developed an eight-qubit quantum annealer using superconducting technology. Tohoku University began accessing the prototype remotely in 2023 to investigate computing systems combining it with an NEC vector supercomputer and simulated annealing.Unlike the physical annealer, NEC Vector Annealing uses a quantum-inspired algorithm running on the company’s conventional SX-Aurora TSUBASA vector hardware. It can therefore be deployed without the specialist hardware and cryogenic environment required by a superconducting quantum system.NEC demonstrated one of the first superconducting solid-state qubits in 1999. Its reported hardware withdrawal illustrates a broader commercial challenge: building useful quantum computers demands substantial investment and long development periods, while the timing of any return remains uncertain.NEC did not respond to SDxCentral’s questions about the scope of the decision, its effect on staff, or the future of its quantum networking and security programs by publication time. More in Quantum 19 Jun 2026 Cisco, HPE events highlight platform battle, lure of Las Vegas 19 Aug 2026 Nvidia joins Israeli consortium to develop quantum-secure network technologies 04 Aug 2026 Quantum networking roadmap identifies infrastructure priorities More in The Silicon & Supercomputing Channel The Sovereignty Supplement 02 Jul 2026 AI to drive optical transceiver market value to $112B by 2031 Episode Building the future of quantum networking