History (1997): NEC to Manufacture IBM HDDs Under License in Philippines

If there’s a Japanese firm that has invested heavily in HDD production without much results, it’s NEC. Since 1988, the company has been making 5.25-inch units. The company subsequently began several lines of 3.5-inch and 1.8-inch drives, signing agreements with external companies for their design, and remaining nonetheless a minor player in the HDD industry.

The company currently also produces 3.5-inch devices at NEC Technologies Hong Kong, Ltd.’s contract manufacturing plant in the Philippines.

Will the company get lucky this time? NEC has just signed a HDD and technology business agreement with Big Blue, and will receive a license from IBM SSD to manufacture specific IBM-developed 3.5-inch high performance desktop units.

IBM currently manufactures these drives, which will now be produced and sold by both companies under their respective brand names.

NEC expects to start production of the drives in its Philippines’ facility, where capacity will be expanded to 5 million units per year by the fall of 1998, and plans to ship them early next year.

At the same time, NEC has just become IBM’s second largest client for MR heads, after Samsung.

As far as we know, this is the first time in IBM’s history that it will allow a second firm to manufacture its own HDDs.

This article is an abstract of news published on ≠114 on July 1997 from the former paper version of Computer Data Storage Newsletter.