IBM, Sanmina-SCI Sign Production Pact

Contract manufacturer Sanmina-SCI Corp. said it will take over production of some IBM desktop computers in the United States and Europe in a $5-billion pact IBM said will cut its costs in the extremely competitive personal computer industry.

The move comes on the back of declining revenue in IBM’s personal computer and printing division. San Jose-based Sanmina-SCI will produce the NetVista computers, IBM’s main desktop line covering several different models sold primarily to large corporations.

IBM closed up 65 cents at $124.70 on the New York Stock Exchange. Sanmina-SCI was up 48 cents at $22.57 on Nasdaq.