Western Digital Corp. of Irvine announced Tuesday that IBM, its single largest customer, will buy several of the company's electronic components for IBM's worldwide computer manufacturing operations in a deal reportedly worth about $70 million.
Although both companies declined to reveal the size of the contracts, Western Digital officials said the deal would keep IBM's purchases at about the same level as they were in the fiscal year which closed June 30. During that year, IBM purchases accounted for about 30% of Western Digital's estimated $250 million in revenues, or slightly more than $70 million.
Additionally, analysts are projecting that IBM purchases will account for about 20% of the company's estimated $350 million in the current fiscal year.
Roger Johnson, Western Digital's chairman and chief executive, said the latest IBM agreement means that his company's products would be used in several different IBM computers made for both the U.S. and international markets.
"We're pleased because they're the industry leader and our position with them is improving," Johnson said.
Under the agreements, IBM will purchase a variety of data storage chips and communications products.