3Com and Natsteel Electronics, Ltd., Form Strategic Manufacturing Alliance; NatSteel to Acquire 3Com's Mount Prospect, Ill.- based Manufacturing Facility - Company Business and Marketing

Edge: Work-Group Computing Report, March 27, 2000

3Com Corporation (Nasdaq: COMS) and NatSteel Electronics, Ltd. (NEL), a manufacturing company based in Singapore, announced Monday the intent to form a strategic manufacturing alliance.

The alliance includes the sale of 3Com's manufacturing operations in Mount Prospect, Ill., to NEL as well as a supplier agreement in which NEL will continue to manufacture broadband modems and carrier-based, multi-services access platform equipment for 3Com.

"A key operations goal for 3Com is to deliver high-quality products to our customers as quickly as possible," said John McClelland, senior vice president of 3Com's Supply Chain Operations. "This strategic alliance with NEL gives 3Com access to state-of-the-art manufacturing, and high-technology configure-to-order and high volume build-to-order capabilities to meet that goal."

"3Com's 690,000-square foot facility establishes a significant presence for NEL in the U.S. and will provide our global customers regional access to technologically advanced manufacturing and related services," said Chay Yee Meng, CFO of NEL. The company will also provide order fulfillment and ship finished goods to the customers' distribution channels.

3Com and NEL, joined by Accton, a networking equipment designer and supplier to 3Com, also announced Monday a strategic partnership to form a new company that will be responsible for the design, marketing and sales of Internet access products. All the new company's products will continue to be manufactured at the facility.

NEL will retain all of 3Com's 1,200 employees affiliated with the Mount Prospect, Illinois, manufacturing facility. The transfer will be completed in May 2000.

NatSteel Electronics Ltd. (NEL) is the fifth largest electronic contract manufacturer in the world in terms of revenue and provides electronic manufacturing services to many of the world's technological leaders. The contract manufacturing services of NEL include printed circuit board assembly, design and testing services, system and subsystem assembly of electronic products and logistic support for its customers. The NEL group has manufacturing operations in Asia, Mexico, USA and Hungary and sales offices in the USA and Europe. NEL was listed on the Stock Exchange of Singapore in October 1997 and has a current market capitalization in excess of US$4 billion. More details about NEL can be found on http://www.nel.com.sg

With more than 300 million customer connections worldwide, 3Com Corporation connects more people and organizations to information and each other in more innovative, simple and reliable ways than any other networking company. 3Com delivers web-enabled solutions to consumers, small- to medium-sized business sites and network service providers. FMI: www.3com.com.