Top hard disk drive maker Hitachi Global Storage Technologies (Hitachi GST) will invest up to US$500 million to build a huge manufacturing center in this high-tech-driven southern China city, it was announced Monday.

The new plant, to cover 35,000 square meters in the Shenzhen Export Processing Zone, is expected to produce 70 million hard disk drives annually when running in top gear, according to information released by the Shenzhen municipal government.

About US$200 million will be injected during the first phase of the project, which is expected to be under construction during the last quarter of the year.

Dirk Thomas, the newly appointed president of Hitachi GST Greater China and general manager of the new plant, said the money would mainly cover the cost of land, infrastructure, equipment and daily operations.

The production of 3.5-inch disk drives is expected to start in the fourth quarter of 2005. But ultimately, the plant will be capable of producing 3.5-inch, 2.5-inch, 1.8-inch and 1.0-inch drives, said Thomas.

In the beginning, the products will only be used in desktop computers, before being used in the production of laptops and other devices.

"The US$200 million investment will realize a production capacity of more than 30 million disk drives a year," Thomas said, pointing out that it was difficult to forecast a figure as it would be heavily based on overall market performance and market demand.

"We hope production will double when the full investment is fully realized," he said.

In the first year of production, the plant is expected to produce 10 million disk drives. Currently, Hitachi GST has hard disk drive manufacturing plants in Singapore, Thailand and the Philippines, which produced 43 million units last year.

The Thailand plant, the biggest, pumped out nearly 70 per cent of Hitachi GST's product.

However, the Shenzhen plant will be the top producer once fully completed. By then, its production capacity could account for up to 50 per cent of the total, said Thomas.

An additional 7,000 people will be employed during the first phase of the new facility, bringing the number of employees in all of Hitachi's investments in Shenzhen, including another two manufacturing companies, to 11,500, said Jun Naruse, Hitachi GST's chief executive officer.

(China Daily June 22, 2004)