Global EMS provider Solectron has entered an agreement with NEC that will see the latter transfer manufacturing from its Ibaraki, Japan facility to Solectron and outsource manufacturing of its server, workstation and storage products.
Under the agreement, Solectron would purchase all shares of a new company established by NEC and take over the Ibaraki manufacturing business, including about 500 highly-skilled workers at the plant, according to Solectron ceo and chairman Koichi Nishimura.
“We are pleased to expand our relationship with NEC, the Japan market leader in servers and workstations,” Nishimura said.
“This is another positive indication that Japanese companies are utilising our supply chain model to help them compete more effectively in the global marketplace.”
Through the alliance, NEC expects to improve the price competitiveness of its products by leveraging Ibaraki’s leading-edge production techniques with Solectron’s global purchasing power, the company said in a statement.
Both companies now expect to enter a multi-year agreement for Solectron to supply manufacturing services to NEC, with Solectron also leasing production space at the site as well.
The companies will now begin negotiating this final agreement, with the process expected to conclude in the first quarter of calendar year 2002, the companies added.