IBM Expands Manufacturing Worldwide As Storage Component Demand Skyrockets

Maxtor Announced as Newest IBM Customer

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San Jose - 20 Feb 1998: . . . IBM today announced a $20 million expansion of its perations in China, with the unveiling of a new plant for manufacturing hard disk drive magnetoresistive (MR) heads. The news coincides with the shipment of the 10 millionth MR head since IBM began selling them to original equipment manufacturers (OEMs) 17 months ago. Of the 10 million heads, nine million were shipped in just the last five months.

IBM today also welcomed hard drive manufacturer Maxtor Corporation as the latest customer to purchase IBM MR heads for integration into its desktop PC drives.

An MR head is a hard disk drive component that can fit on the head of a pin. It allows a hard drive to read and write enormous amounts of information, meaning more data can be stored on the drive.

"IBM technology meets computer users' demands for increasing computer storage for their electronic mail, video, and downloads from the Internet," according to Joanne Mumola Williams, director of worldwide sales and marketing, IBM OEM MR head business unit.

Since 1996, IBM has invested an additional $680 million in its Storage Systems Division for increased manufacturing of OEM MR heads in San Jose, Europe, China and other parts of the world.

The China plant is in the Futian Free Trade Zone near Shenzhen and will be operated by Shenzhen IBM Technology Products Co., Ltd., a new company which is fully-owned by IBM. The new company will employ approximately 200 people by the end of this year. The new facility under construction will be about 14,000 square meters.

According to TrendFOCUS, an analyst firm, the OEM MR head business is expected to be $5 billion industry-wide by 2000.

Maxtor is IBM's latest OEM customer.

IBM will be a key supplier of MR heads for Maxtor's desktop PC drives.

"Maxtor looks for the most reliable and advanced technology to incorporate into its leading-edge products. IBM has this technology as well as the supply to satisfy our needs," according to Dave Wickersham, vice president, worldwide materials, Maxtor Corporation.

Continued technology leadership

IBM has expanded its product line to include the Giant Magnetoresistive (GMR) head, the world's most sensitive sensor for reading and writing data in a disk drive. Customers are now sampling IBM's GMR heads for integration into future hard disk drives.

Using an advanced version of GMR technology, IBM scientists recently more than doubled their own world record in hard-disk data-storage density, surpassing the 10-billion bits per square inch --11.6 billion bits to be exact-- data-density milestone just one year after they set their last mark. This is about the equivalent of 725,000 pages of double-spaced typewritten pages. The laboratory demonstration shows that IBM is on track to providing products with the 10 billion bit density by the year 2001.

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For more information about IBM's storage business, access its Web page at

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