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IBM outsources PC manufacturing division

Does $5bn deal signal the beginning of the end for PC production?

By Sonya Rabbitte

Published: 9 January 2002 10:00 GMT

IBM will outsource production of some desktop computers to manufacturing firm Sanmina-SCI in a $5bn deal aimed at cutting the computer giant's costs.

Under the terms of the three-year contract, Sanmina SCI will produce NetVista computers - IBM's main desktop line - for its US and European markets.

The company will take on 900 IBM employees in North Carolina and 82 at IBM's Greenock plant in Scotland.

The move comes after IBM's PC division posted a 28 per cent fall in third quarter results, leading to speculation that IBM may quit the PC business altogether in the near future.

Sanmina SCI also agreed to acquire two IBM buildings and some capital equipment at the North Carolina site, for an undisclosed amount.

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