Gateway Selects Nashville As Home For New Configer-To-Order Manufacturing Facility

Tuesday, May 16, 2006 | 7:00pm

Facility will build configure-to-order desktops, notebooks, servers and storage arrays to meet growth needs of the company

Irvine, Calif. – Gateway, Inc. (NYSE: GTW) has selected Nashville, Tenn. as the site for a manufacturing facility that is scheduled to open by October 2006. First-year employment in the facility is expected to grow to more than 300 people with an annual payroll of about $8 million. The Nashville facility will allow the company to enhance its responsiveness to customer demands in the Business, Education, Government and Consumer market segments.

The new plant will assemble configure-to-order (CTO) desktops, notebooks, servers and storage arrays according to customer specifications, as well as provide custom integration and software imaging services. The presence of available space in Nashville, together with leveraging the infrastructure of one of Gateway’s existing suppliers, which will own a minority interest in the operation, is expected to allow for an efficient and timely start up of the facility.

“The higher-skilled, better-paying jobs that Gateway will bring to Middle Tennessee falls right in line with the type of economic opportunities we’re working to create all across the state,” said Governor Phil Bredesen. “This announcement is a positive win for technology business growth in Tennessee. Gateway is a well-respected company and we believe their presence in Tennessee will not only bring our state more visibility in this arena, but will offer the company the work force and innovation required to grow and expand.”

“This facility will support Gateway’s Professional and Consumer Direct business units from an operational perspective in order to improve the entire customer experience, including quality, cost and delivery,” said Rick Snyder, Gateway’s chairman and chief executive officer.

“We want to thank Governor Bredesen and state officials in Tennessee for working with us on this important initiative. Our relationship with the State of Tennessee and its very capable workforce reinforces our commitment to providing an exceptional customer experience.”

In addition to the state of Tennessee, the Tennessee Valley Authority and the Nashville Area Chamber of Commerce were key partners in attracting this important project.

Interested Applicants

Gateway will begin recruitment efforts for the Nashville, Tenn. facility in conjunction with the State of Tennessee’s recruiting and staff development organizations beginning the week of May 22, 2006. Qualified candidates in the areas of manufacturing; production planning, scheduling and procurement; production process engineering and staff development can obtain more information by visiting: http://www.state.tn.us/labor-wfd/mainfindajob.html.

About Gateway

Since its founding in 1985, Irvine, Calif.-based Gateway (NYSE: GTW) has been a technology pioneer, offering award-winning PCs and related products to consumers, businesses, government agencies and schools. Gateway is the third largest PC company in the U.S. and among the top ten worldwide. The company’s value-based eMachines brand is sold exclusively by leading retailers worldwide, while the premium Gateway line is available at major retailers, over the web and phone, and through its direct and indirect sales force. See http://www.gateway.com for more information.

Special note

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not materialize or prove incorrect, could cause Gateway’s results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be forward-looking statements, including any projections or preliminary estimates of earnings, revenues, or other financial items; any statements of plans, strategies and objectives of management for future operations; the extent of seasonal changes in demand; any statements regarding proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks that contribute to the uncertain nature of these statements include, among others, risks related to shifting our distribution model to third-party retail; competitive factors and pricing pressures, including the impact of aggressive pricing cuts by larger competitors; general conditions in the personal computing industry, including changes in overall demand and average selling prices, shifts from desktops to mobile computing products and information appliances and the impact of new microprocessors and operating software; the ability to simplify the company’s business, change its distribution model and restructure its operations and cost structure; component supply shortages; short product cycles; the ability to access new technology; infrastructure requirements; risks of international business; foreign currency fluctuations; risks relating to new or acquired businesses, joint ventures and strategic alliances; risks related to financing customer orders; changes in accounting rules; the impact of litigation and government regulation generally; inventory risks due to shifts in market demand; the impact of employee reductions and management changes and additions; and general economic conditions, and other risks described from time to time in Gateway’s Securities and Exchange Commission periodic reports and filings. Gateway assumes no obligation to update any forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made.

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