Japanese electronics conglomerate Mitsubishi Electric Corp is in talks with NEC Corp about outsourcing the manufacture of its PC server line, according to the Nihon Keizai Shimbun.

The Japanese newspaper reports that Tokyo, Japan-based Mitsubishi will outsource the production of its PC servers to NEC, which is also based in Tokyo, to cut costs and better compete with US-based server giants such as IBM Corp, Hewlett-Packard Co and Dell Computer Corp.

Mitsubishi already OEMs its laptop and desktop PCs from NEC, and outsources the manufacture of Unix-based servers to HP. NEC is the biggest PC server vendor in Japan, followed by Fujitsu Ltd, Dell and IBM. Mitsubishi is not among the top vendors, and shipped only 13,500 servers in total in the year to March 2002.

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