Xerox, Tandem to Buy Parts From Tandon

Tandon, the leading independent U.S. maker of disk drives for the microcomputer industry, announced Tuesday that it will manufacture computer components for Xerox and Tandem. The agreements will bring the Chatsworth-based company as much as $100 million a year in new revenue for each of the next three years, according to industry sources.

The agreements, expected to further Tandon’s push into computer system manufacturing, call for the company to make disk drives and central processing units for personal computer workstations that will be sold under the Xerox and Tandem labels.

Plagued by cheap imports in its bread-and-butter disk-drive business, Tandon has predicted that it will get 80% of its revenue by 1987 from manufacturing computer systems.

Tandon produces microcomputers for private-label sale in the United States and for sale under the Tandon name in Europe. It now draws one-third of its revenue from such systems.

Tandem, a Cupertino, Calif., computer company, would not comment on its agreement except to confirm that Tandon will make parts for its new workstations that are compatible with the IBM AT computer. Ranjit Sitlani, executive vice president at Tandon, said his company will make “innovative” IBM-compatible products for Xerox but would not elaborate.

Shipments to Tandem already have begun, and volume shipments to Xerox are scheduled to begin later this year, Sitlani said.

He added that the products for Tandem and Xerox will be assembled in Tandon’s facilities in Simi Valley and Thousand Oaks, but there will not be any new hiring immediately.

Tandon recently posted its second consecutive quarterly profit, earning $1.9 million on sales of $58.2 million for its fiscal second quarter ended March 28.