Under the agreement, both companies will manufacture the drives, which are currently made by IBM. The drives will then be marketed under the brand names of both NEC and IBM.
IBM is one of the largest hard disk drive manufacturers in the world. IBM manufactures hard disk drives for all computer types ranging from mainframes to notebooks PCs. The company just announced a large-capacity 3.5-inch 8.4GB hard disk drive for desktop PCs and is slated to bring out a 5GB hard disk drive for notebook PCs. To produce the drives, NEC will expand the capacity of its factory in the Philippines to a capacity of five million disk drives per year.
NEC is planning to ship the IBM-designed drives in early 1998.
The agreement allows IBM to increase its hard drive revenues in a high-demand storage market without further investment in manufacturing facilities.