United States telecommunications equipment manufacturer Motorola has received central government approval to pump US$1.9 billion into its mobile phone and pager chip manufacturing base in the port city of Tianjin. The investment, which would raise the company's mainland investment to US$3.4 billion, is part of its efforts to develop a full complement of in-house manufacturing services, from chip design and wafer fabrication to finished products. The move, which would make Motorola the mainland's largest single foreign direct investor, aims to cement the company's position as the country's leading wireless communications manufacturer. Yesterday's announcement is the latest indication that foreign companies are moving with increasing speed to participate in the mainland's fast-growing semiconductor market. Fuelled by computers, communications and other consumer devices, the value of the country's chip sector is expected to triple to US$27 billion in 2003, from US$8.6 billion last year. Last month, the State Council announced a series of tax breaks to aid the development of information technology industries, including integrated chip production, to alleviate pressures created by rising worldwide demand. The announcement also draws to a close a five-year campaign for the US multinational, which started construction on the facility in 1995, but was forced to postpone its plans by the regional financial crisis and a slump in the semiconductor industry. Christopher Galvin, Motorola chairman and chief executive, said the company's initial optimism had been validated. The bulk of the investment will be made at the Motorola Tianjin Integrated Semiconductor Manufacturing Complex, a new site that will focus on producing semiconductors, or Digital DNA, that will be used to support wireless communication devices, vehicle electronics and other advanced consumer products. 'The site will become one of the largest integrated semiconductor manufacturing facilities in the world, and the most advanced in China,' Mr Galvin was quoted as saying. The complex, which also will engage in research and development and training, is expected to employ 2,400 people when it begins full operations in 2002, according to the company. Motorola's present facility already employs 10,000 workers. The remainder of the funds will be used to expand production at existing facilities in Tianjin, which will be renamed the Motorola Asia Telecommunication Product Manufacturing Site. That site would focus on making mobile telecommunications products for domestic and export markets, the company said. Motorola is not the only foreign-invested company that is seeing profit potential in the mainland's emerging semiconductor market. NEC, which together with joint-venture partner Shanghai-based Hua Hong Microelectronics Co has invested in a semiconductor fabrication plant, is completing a planned expansion that would double output of memory chips at the facility. The company also has signed an agreement to invest US$64 million to increase production capacity for memory chips at Shougang-NEC Electronics, its joint venture with Beijing Shougang Steel Co. Taiwan plastics and electronics firm Grace T.H.W. Group is exploring the possibility of building a microchip fabrication plant in Shanghai. At the weekend, Taiwan media reported the company was seeking to raise US$650 million to start a foundry producing eight-inch silicon wafers. The company would partner with Winston Wang, son of Taiwan plastics tycoon Y.C. Wang, and Jiang Mianheng, son of President Jiang Zemin. The younger Mr Jiang is affiliated with Shanghai Alliance Investment and Shanghai Simtek Industry, which partnered with Grace to establish a US$74.5 million Shanghai-based electronics fibre factory earlier this year.