Xyratex Expands Operations in Malaysia.

Xyratex Executes on Strategy of Global Expansion, Taking Advantage of Ongoing Data Storage Growth in Malaysia

HAVANT, England -- Xyratex Ltd. (NASDAQ:XRTX), a leading provider of enterprise class data storage subsystems and storage process technology, today announced that it has successfully grown its business operations in Seremban, Malaysia. Xyratex first recognized the business advantages of the region 10 years ago and established a presence in January 1998. Since then Xyratex has expanded its Malaysian business in all areas, transforming the Seremban facility into a regional base for world class manufacturing, as well as expanding customer support across its entire Asian sector.

In the past two years, Xyratex has doubled its number of employees and tripled the capacity of its manufacturing facility to support both the growth in production volumes and an ever expanding range of products provided by the Xyratex Storage Infrastructure Division. This has fueled a three fold increase in purchasing spend with a network of Malaysian suppliers. Additionally, Xyratex continues to expand its product development capabilities, and predicts that by 2008 over 50 employees will be involved in the development process.

"The Xyratex Malaysia operation has proven a major success for the company and has firmly established itself as the single worldwide operational and fulfillment facility for the Storage Infrastructure Division," said Adam Wray, executive vice president, Storage Infrastructure Division, Xyratex. "This facility and its employees have proven to be a key enabler for our business growth and have provided the required support and responsiveness to the demands of our customers in the region and worldwide."

Xyratex's Malaysian facility also provides regional control and support for its expanding customer service organization with locations in Singapore, Malaysia, Thailand, China and Japan. This infrastructure enables essential 24/7 on-site support to Xyratex's disk drive customers' operations in the region.

The Malaysian Industrial Development Authority (MIDA) has provided support and guidance services to Xyratex since the Seremban office was established. Their consistent advice in business related matters such as local legislation and taxation has been instrumental in Xyratex's success to date.

"Our decision to invest in Malaysia was undoubtedly the right strategic choice for Xyratex. Our Malaysian employees are a valued asset for the company and have enabled us to drive growth and manage the challenges of our business," said Steve Barber, CEO, Xyratex. "The guidance and support provided by the Malaysian Industrial Development Authority (MIDA) has been consistently positive and helpful in developing our business activities. Based on our very positive experience of working in Malaysia, we are actively assessing further ways to expand our business in the country."

About Xyratex

Xyratex is a leading provider of modular enterprise class data storage subsystems and storage process technology. The company designs and manufactures enabling technology that provides OEMs, Solution Integrators and disk drive manufacturers with data storage products to support high-performance storage and data communication networks. Xyratex has over 20 years of experience in research and development relating to disk drives, storage systems and high-speed communication protocols.

Founded in 1994 in an MBO from IBM, and with headquarters in the UK, Xyratex has an established global base with R&D and operational facilities in Europe, the United States and South East Asia. For more information, visit www.xyratex.com.