Update: Acer signs IBM and promises more

The IBM deal is set for seven years -- as Acer chairman Stan Shih remarked, "In the world of technology, seven years means forever" -- and strengthens an ongoing relationship of product swapping.

IBM will sell its floppy and hard disk drives and some intellectual property to Acer, while Acer will sell monitors and other peripheral products it makes to IBM. Acer already manufactures a significant percentage of IBM's Aptiva brand.

And Acer is also widely expected to sell up to 30 per cent of memory-chip maker Acer Semiconductor to microchip foundry leader Taiwan Semiconductor. Acer and Taiwan Semicon set a joint briefing for Tuesday morning.

For IBM, the deal represents another in a string of multi-billion dollar product-supply deals. In March, IBM and Dell Computer Corp. announced the first of these mega-supply deals, valued at $16bn over seven years. IBM agreed to supply Dell with a range of key computer components including disk drives, chips, network attachments and monitors.

Acer already manufactures a significant percentage of PCs that IBM ships under its Aptiva PC brand, targeted to home users.

Also in March, IBM and corporate data storage equipment maker EMC agreed on a $3 billion computer parts and technology pact, over five years. EMC is expanding its purchases of advanced IBM disk drives.

"IBM has made it clear that they are going to have a number of additional announcements of more of these kind of deals with potential customers," said Gary Helmig, a SoundView Technology Group analyst.