"...SINGAPORE--Ionics EMS, an electronics contract manufacturer in the Philippines, said it signed a deal with Royal Philips Electronics, one of Europe's largest consumer electronics companies, to make 10 million CD-RW drives a year. Based on the industry average price of $100 per drive, Ionics' contract would be worth about $1 billion a year. A CD-RW, or CD rewritable, allows a person to burn a CD and then record over it again and again.
The agreement is a boost for Ionics. As more electronics companies subcontract their manufacturing, Ionics needs contracts of this magnitude to compete with even larger subcontractors that are expanding internationally, including Milpitas, Calif.-based Solectron. Production, scheduled to begin in the fourth quarter, is scheduled to reach full capacity by 2002. The company said it will manufacture 450,000 units for Philips this year, accounting for about 29 percent of Ionics' sales. In 2001, Ionics expects its output to reach 2.5 million units in each quarter. Philips will make up 80 percent of Ionics' sales next year, Qua said..."