HP to Explore Expanded Research and Development Activity in Puerto Rico; New HP Labs Operation Possible

Business Wire, Sept 29, 2004

PALO ALTO, Calif. & SAN JUAN, Puerto Rico -- HP (NYSE:HPQ) (Nasdaq:HPQ) and the government of Puerto Rico today announced they have signed a memorandum of understanding to explore expanding HP's research and development presence on the island, with the possibility of establishing a new branch of HP Labs there.

HP Labs is the central research organization for the company. It is headquartered in Palo Alto and has facilities in Bangalore, India; Bristol, U.K.; Cambridge, Mass., USA; Haifa, Israel, and Tokyo, Japan.

"We are very pleased at the prospect of increasing HP's R&D activities in Puerto Rico," said Richard A. (Dick) Lampman, senior vice president of research, HP, and director, HP Labs. "HP has been a proud member of the Puerto Rican community for 25 years with its manufacturing and development operations in Aguadilla. We are eager to play an appropriate role as the government seeks to expand its technology sector."

"Puerto Rico's sustainable economic development largely depends on the establishment of a culture of innovation based on science and technology, a high level of both public and private investment in research and development, and a globally competitive, knowledge-based economy," said Gov. Sila M. Calderon. "We are looking forward to our continued relationship with HP."

The memorandum of understanding was signed by Lampman and Hon. Milton Segarra, secretary, Department of Economic Development and Commerce.

HP currently employs approximately 2,000 people in Puerto Rico, including its Aguadilla facility and its San Juan sales and service organization. Aguadilla manufactures a wide range of products, including thermal inkjet cartridges and boards for HP Superdome servers. If a lab were to be established, it would likely be located initially at the HP site, with the possibility of moving to an adjacent technology park that is expected to undergo construction soon.

Staffing could include current HP Puerto Rico personnel, supplemented by new hires from universities within the Commonwealth. The lab would report to Howard Taub, vice president and director, Printing and Imaging Research Center, HP Labs, in Palo Alto. Scientists and graduate students from the University of Puerto Rico are also expected to play a role in the research efforts. The university conducts world-class research in areas of interest to HP.

The primary focus area could be in the pharmaceutical industry. Puerto Rico is home to a large number of drug manufacturing companies and HP has been exploring how to use new and existing technologies to address key challenges or create new business opportunities within the industry. For example, the technologies could play a role in anti-counterfeiting activities for drug companies or provide new ways to dispense medication.

Other areas of research could include utility computing and advanced micromechanical devices.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. For the four fiscal quarters ended July 31, 2004, HP revenue totaled $78.4 billion. More information about HP is available at www.hp.com.

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