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Micron secures $20bn DRAM deal with Compaq

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Micron Technology yesterday announced a five-year deal to provide Compaq with chips for its PCs. Through the move, the US chip vendor will become Compaq's single biggest provider of memory. It will supply almost the majority of Compaq's memory products worldwide, Micron said. The two US giants were keeping the financial details under wraps, but industry sources were reported to be valuing the deal at up to $20 billion. Compaq also said it intended to keep its existing levels of memory in PCs. The deal will protect it from chip shortages hitting the rest of the industry. "Compaq is committed to maintaining performance standards across our PC product line," said Ed Straw, senior VP of Compaq supply chain management. "We will not compromise the fundamental performance of our PCs." Compaq said the deal with Micron would ensure future availability of memory components in its PCs. This follows last week's announcement from rival Dell that it would either encourage customers to buy PCs will less memory, or raise prices on certain products, following chip shortages. The direct selling vendor also warned that a memory product shortfall would affect its profits for Q3. ®

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