PC makers plan electronics and computer parts e-mart
By Staff -- Purchasing, 6/15/2000 2:00:00 AM
Compaq Computer, Hewlett-Packard and 10 other high-tech companies are creating an Internet marketplace for electronics and computer components. The exchange will allow participants to buy and sell chips, hard drives and other parts through online catalogs and e-auctions. The companies expect the exchange to reduce their costs and inventories and allow them to deliver products faster.
H-P CEO Carly Fiorina says the high-tech marketplace has potential to be larger than any other Internet trading community, citing one analyst's estimate that the electronics market will be worth $600 billion in 2004. Founding companies represent one-third of the electronics industry's purchasing power, she says. "We're creating efficiencies and reducing transaction costs for all industry players, which ultimately benefits the people who buy our products," Fiorina says.
Fast part deliveries are critical in the high-tech industry, where many manufacturers keep small inventories to prevent parts and finished goods from becoming obsolete before they are used or sold. Other partners in the exchange are computer-maker Gateway, hard-drive manufacturers Quantum and Western Digital, Japanese electronics giants Hitachi and NEC Corp., chip-makers Advanced Micro Devices, Infineon Technologies, Solectron and SCI Systems, plus Korean conglomerate Samsung.
Conspicuously missing from the list are chip titan Intel and Dell Computer. Fiorina says more "founders" are possible, and the exchange will be open to anyone who wants to trade. Companies already involved plan to invest $100 million in the venture and have committed to do a significant part of their buying and selling through the exchange.
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