Groundbreaking IBM/Great Wall Deal to Accelerate Information Technology Growth in China

Subsidiary of Great Wall Technology To Produce IBM Hard Disk Drives in Sweeping Technology, Manufacturing and Distribution Agreement

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Shenzhen, China & San Jose, Calif - 28 Feb 2002: In the first deal of its kind for China, IBM and Great Wall Technology Limited have signed an agreement that will make Great Wall Technology the first Chinese company to manufacture and sell computer hard disk drives for the worldwide market. Under terms of the agreement, Great Wall Technology's subsidiary, ExcelStor Technology, will manufacture the 40 gigabyte (GB) version of IBM's newly released Deskstar 120GXP desktop drive. The first ExcelStor-made drive is expected to roll off the assembly line in the second half of 2002.

This three-year deal combines IBM's advanced technology and Great Wall Technology's cost-efficiency to support the exploding Chinese market, in effect creating a new business model that will help propel the next phase of China's information technology while expanding IBM's reach to new markets. According to IDC, an industry research firm, China's information-technology spending is expected to increase 25 percent over the next few years, while IT growth in the general Asian-Pacific region is expected to top 12 percent.

The two-part deal announced today includes the following:

Financial terms of the agreement are not being disclosed.

This agreement makes ExcelStor the first native Chinese company to manufacture hard disk drives for IBM and to market drives under its own brand. The new plant is expected to generate more than 3000 new jobs in the Shenzhen area of Southern China where the plant will be located.

"We see the benefits of this relationship on many fronts -- for IBM and Great Wall Technology and for the consumers and workers of China," said Doug Grose, general manager, IBM Storage Technology Division. "IBM will realize savings through a series of co-operations with Great Wall Technology, while ExcelStor and Great Wall Technology will improve the local economy through additional employment. On a broader level, China's information technology growth will be spurred by the infusion of cutting-edge technology, which will give it the competitive edge to participate in the worldwide hard disk drive market."

"IBM has long been known as an innovator in the hard disk drive industry in both product superiority and technology leadership. We welcome this collaboration with IBM to bring advanced technologies and strong customer services to the local market. Great Wall Technology is honored to extend our relationship with IBM by adding the Deskstar 120GXP to our current offerings," said Wang Zhi, chairman of Great Wall Technology and ExcelStor. "As a professional team devoted to the storage industry, we feel proud to manufacture top-quality products in our Shenzhen base. This cooperation will contribute to the growth of China's IT industry, and we believe our skilled workforce in China is well-positioned to continue IBM's commitment to product excellence," added Eddie Lui, president/CEO of ExcelStor.

IBM in China -- A Long History
This latest venture expands the relationship between IBM and Great Wall Technology, which began in 1994. Other IBM China and Great Wall Technology joint ventures in China include International Information Products (Shenzhen) Company Ltd. (personal computers manufacturing), Shenzhen GKI Electronics Co. Ltd. (electronic circuit card manufacturing), and Shenzhen Hailiang Storage Products Co. Ltd. (storage products manufacturing).

IBM's business in China initially dates back to 1934 when the company installed a business machine for the Peking Union Hospital. In 1979, after an absence of 30 years, IBM resumed its business in China. A medium range computer was installed at the Shenyang Blowers Works, the first IBM machine installed in the country since the founding of the People's Republic of China. IBM's business in China has expanded steadily since then. Today, IBM has more than 2900 employees in China.

Deskstar 120GXP
IBM's Deskstar line is the industry's leader in high-capacity, high-performance desktop hard drives, backed by the IBM hallmark of service and quality. Performing at 7200 RPM, the 40GB Deskstar 120GXP drive has the industry's leading low acoustics, lowest power-consumption and highest shock protection benefits in its class. The 40GB version of the Deskstar 120GXP is designed to support desktop and multimedia applications that require high performance at an affordable price.

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