IBM, the world's largest computer maker, said it will be the main supplier of advanced chips and components to the main builder of China's Internet system.

IBM agreed with Huawei Technologies to supply a variety of sophisticated processors and chips for Huawei's routers and switches, the key building blocks for networked computers that form the Internet. Terms weren't disclosed.

The multi-year agreement could enhance IBM's chances of selling a broader range of computer products, including server computers, in China as the nation increasingly uses the Internet.

"We view Huawei as a very significant customer, and this establishes a stronghold for our technology in the Asia-Pacific region," said Steve Longoria, IBM's director of marketing for network processing.

In 2002, the business from Shenzhen-based Huawei will add roughly 10 percent to IBM's total revenue from the sale of network processing equipment, he said.

Among the components IBM will supply to Huawei are network processors, chips that rout packets of data, and other customized chips linked to network software.

Huawei, founded in 1988, is China's primary maker of routers and optical data-transmission systems used by telecommunications companies. The company said it had US$1.3 billion in sales for the first half of 2000 and contracts in Russia, eastern Europe, Africa and Asia. It has cooperative arrangements with Texas Instruments, Lucent Technologies and Motorola.

IBM announced a joint venture last month with China Great Wall Shenzhen to make advanced printed circuit-board assemblies for Finland's Nokia at a factory near Beijing.

(CNET News.com)