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Mitsubishi to end computer making
TOKYO, Japan -- Japan's Mitsubishi Electric Corp will effectively end its computer manufacturing business by outsourcing production of its computer servers to NEC Corp, according to a report in the Nihon Keizai business daily. Shares in Mitsubishi Electric are down about a third of a percent to 314 yen in early trade Tuesday. NEC is off sharply, down 1.91 percent to 461 yen. The broader market, measured by the Nikkei 225 average, is off 0.83 percent to 8,537.76. Mitsubishi has already contracted out production of its personal computers to NEC. It decided to end server production due to fierce competition amid a price war waged by U.S. rivals such as Dell Computer Corp, the newspaper said. No one at Mitsubishi Electric, Japan's fourth-largest chip maker, or NEC could be reached for immediate comment. The original equipment-manufacturing agreement between Mitsubishi and NEC to cover PC servers would be the first of its kind between Japanese computer manufacturers. It could lead to similar tie-ups in both PC and server production between other domestic manufacturers, the newspaper said. NEC has a leading share of the Japanese PC server market among local makers. It is expected to improve its parts procurement edge through increased production, the Nihon Keizai said. Reuters contributed to this report.
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