Mitsubishi Electric Corp is expanding its manufacturing operations on the mainland with a US$35 million investment to build a new plant in Jiangsu province.
The Changshu Southeast Economic Development Zone facility will make and sell servo motors, numerical controllers and other factory-automation equipment used by mainland manufacturers of consumer electronics devices.
'The Chinese market is experiencing buoyant capital investment, especially to meet the fast-rising demand for smartphones, tablet personal computers and other mobile devices,' the Tokyo-based company said in a statement.
'As manufacturers expand production capacity for these products, they also have been investing more heavily in automation due to labour shortages and rising wages.'
Mitsubishi Electric will next month establish a new mainland subsidiary, Mitsubishi Electric Automation Manufacturing (Changshu), to run the 33,150 square metre facility, which is expected to start operations in December next year.
The company, which started manufacturing on the mainland in 1987, expects the Changshu plant to have 450 employees and generate an annual revenue of US$367 million by March 2016.
It now has about 12,000 mainland staff. The mainland accounted for 45 per cent, or US$2.7 billion, of the company's estimated US$6 billion total revenue in the Asia-Pacific, excluding Japan, in the firm's fiscal year to March.
Market researcher IHS iSuppli said the mainland was responsible for more than 75 per cent of the global contract electronics manufacturing industry's 33 per cent growth last year. It said this sector would post a total revenue of US$376.7 billion this year, up 8.5 per cent from last year.
Apple devices maker Hon Hai Precision Industries, the Taiwanese firm more commonly known by its Foxconn Technology Group trade name, is the industry leader.