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Dell is expected to place orders for between three million and four million white-box PCs to be made over a one-year period starting from the second quarter of 2003, said Mitac spokeswoman Justine Liu.
Liu declined to give further details of the contract under negotiation.
Last month Dell announced plans to sell white-box PCs to small computer resellers serving small and medium-sized businesses, but said the white-box business was expected to account for less than 1% of the company's annual revenue.
The base configuration for Dell's $499 (£323) White Box D510 includes a 1.7GHz Celeron processor from Intel, 128Mbytes of RAM, a 20Gbyte hard drive, a CD-ROM drive and Microsoft Windows XP. It does not include a monitor.