IBM (Armonk, N.Y.) has in recent years gone on a cost-cutting frenzy, due to a changing global economy and lackluster financial results. The computer technology and services company announced the European and U.S. job cuts in May, and is also seeking to unload a 200-mm semi plant in East Fishkill, N.Y.

All indications point to India, targeted by an increasing number of companies seeking to outsource work and set up low-cost plants, becoming a favored location for IBM's future expansion.

In June 2004, IBM's Global Services India Ltd. subsidiary said it would seek approval of the Indian government to manufacture computer systems and related peripherals in India.

Earlier this week, IBM reportedly agreed to take a $150-million, or 24-percent stake in fledgling Indian wafer fab company India Semiconductor Manufacturing Co. (ISMC) . The 8-in. fab, with a capacity of 30,000 wafers per month, is slated to begin operating July 2006.