Japan's Hitachi Global Storage Technologies will move all production of its 3.5-inch hard disk drives to Shenzhen within the next two years as the company seeks to tap growing demand for products such as digital video recorders and television set-top boxes.
At present, the Shenzhen plant mainly makes 3.5-inch drives for its traditional market: desktop computers. Higher-end drives for consumer applications are made in Thailand.
However, this will change by 2008, when Hitachi expects Shenzhen to account for 50 per cent of its hard disk drive output, or 70 million devices annually. Of that, 50 million units will be 3.5-inch drives.
'For this year, the majority of China output will go into traditional [information technology] products,' Greater China president Dirk Thomas said. 'We have to get the plant qualified. Then in 2007, we will begin the transition into higher-end products.'
Hitachi has invested US$100 million in Shenzhen to date and plans to use US$500 million in total. The increase in 3.5-inch manufacturing capacity comes as Hitachi aims to double its global market share of the segment to 18 per cent by 2008.
Thailand will continue to play an important role for Hitachi, especially in the manufacture of 2.5-inch drives for laptop computers, Mr Thomas said.