IBM Corp seemed to be losing the plot a few years ago in the disk drive business, but it has turned itself around in particular with its 3.5 inch hard disk drives, and now NEC Corp has signed a licensing agreement with IBM’s Storage Systems division to manufacture the drives. IBM will continue to make the drives as well, but the agreement enables it to significantly ramp up production. The 4.3Gb drives are targeted at the high performance desktop and entry-level server markets. Both companies will market and sell the drives under their respective brand names. The agreement also sees NEC taking several million of IBM’s magneto-resistive heads, making it customer number two for IBM’s new MR head business, the first being Samsung Electronics Co (CI No 3,150). IBM says NEC is ramping up it Philippines manufacturing plant to double its current capacity. NEC says it expects to ship the first drives early next year.