Toshiba Corporation and Matsushita Kotobuki Electronics Industries, Ltd. (MKE) today announced cooperation in the production of 1.8-inch and 2.5-inch hard disk drives (HDD). Under the terms of an agreement signed today, MKE will manufacture HDD for Toshiba at its Indonesian subsidiary, PT Matsushita Kotobuki Electronics Peripherals Indonesia. Production of 1.8-inch HDD will start in April 2003, with production of 2.5-inch HDD scheduled to start in the latter half of the year.

The demand for small-form-factor HDD has been increasing steadily due to the popularity of portable PCs, car navigation systems and mobile AV products, all of which demand high capacity storage in a compact design. Worldwide shipments of HDD reached 29 million units in 2001 and 35 million in 2002. Toshiba forecasts that demand for these products will continue to grow to 43 million in 2003.

Toshiba has been concentrating its resources for HDD development and production on small-form-factor models, including original development of 1.8-inch models. In order to meet further growth in demand, the company has now entered into an agreement with MKE that will strengthen its small form factor HDD business. MKE will manufacture HDD and provide Toshiba with products that are made with MKE's sophisticated production technology and high-quality manufacturing expertise.

All manufactured products will be sold under the Toshiba brand, and in the future Toshiba and MKE will work together to continually improve the design and manufacturing process of small form factor HDD.