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CHS president outlines Trigem deal details

Denies move toward role of manufacturer will damage core business

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CHS Electronics today outlined its plans with South Korean vendor Trigem to supply low-cost PCs to Europe. Through the newly created company The PC Way, Trigem has started to operate a production and assembly plant at CHS’ distribution facility in Helmond, the Netherlands. CHS is providing the logistics and distribution services to resellers. The joint venture is initially shipping three PC models under CHS’ existing brand-name Yakumo, starting from $550. The Y1 - ic400 has Intel Celeron 400, 32Mb SyncDRAM and 4.3Gb hard drive. The Y2 - ic433 has Intel Celeron 433, 64Mb SyncDRAM and 6.4Gb hard drive. The Y3 - ip450 has the Pentium III 450,64Mb SyncDRAM, and 10.2Gb hard drive. All three come with 56kbps V.90 PCI fax/modem and Windows 98. Claudio Osorio, CHS president and CEO, said the deal was spawned after the distributor experienced big supply chain problems. It was waiting up to one month for products from its vendors. Now CHS had its own manufacturing facility, there should be no such hitches, he said. "The fact that products were coming to distributors very slowly drove the Trigem agreement. With this deal, machines can be assembled in a few hours," said Osorio. He denied suggestions that CHS was taking its eye off the ball in Europe by moving into manufacturing. He stressed that Trigem would act as a normal supplier to CHS. "The PC Way is a vendor for us - a separate company. "We didn’t want the facility to be managed by CHS," he said. "We did not want to re-invent the wheel." Paul Lee, president and CEO of Trigem, said Europe’s move to free Internet usage would result in rocketing lower-cost PC sales. "The sub-$500 PC is a revolutionary movement. Europe is heading towards free Internet usage. This will boost PC sales. "The IT industry is going to be turned upside down, and Trigem strongly believes there is a market for the entry-level system," said Lee. The lower-cost products will aim at home users, first time buyers or small businesses. According to Osorio: "The dependency on distributors is increasing, and on pan-European distributors even more." "No single manufacturer produces all the necessary components... This is a distributor’s market," he said. Trigem formerly made PCs for Olivetti Europe. ®

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