Europe's biggest consumer electronics producer, Philips Electronics already employs 700 people at 15 China R&D centers. Almost all of the new jobs will be created in Shanghai, a Philips official said.

The investment confirms a trend among technology companies to move research activities as well as factory work to low-cost China.

The new jobs will include 50 more engineers for its 100-strong mobile display screen R&D facility in Shanghai.

"We want to beef up our R&D expertise in Shanghai to produce more cutting-edge displays. We are trying to do that locally and we want to focus on China," Harold Hoskens, chief executive of Philips' mobile display unit, said.

Philips did not give any figures for the cost of the expansion in China, where it has already invested about $3.4 billion.

The company derived roughly $2.5 billion in sales last year from China and exported goods worth another $4.5 billion. It wants to double the combined amounts to over $15.4 billion by 2007 -- roughly half of current global revenue.

The company, which also has its largest display manufacturing base in China, wants its R&D facilities in Shanghai to improve technology for customers who want more data packed into their small screens.

The small displays arm, which began producing in Asia in 1989, makes mostly mobile phone, automotive and avionic displays.

But it is mobile phone demand that drives the industry, making up roughly 70 percent of unit sales.

Hoskens said future growth, especially for more sophisticated displays, would be driven by the widespread use of the third-generation (3G) cellphones.

Philips, which also has manufacturing plants in Japan and Brazil, expects demand for mobile phones to rise by more than 12 percent to 650 million this year.

Philips has repeatedly said it was on track to double overall revenue from China to over 12 billion euros ($15.4 billion) by 2007, roughly half of global revenue.

Philips MDS is a business unit within Philips Semiconductors, which posted $5.6 billion in sales in 2003, up 30 percent from the previous year.

Hoskens said he also saw no slowdown in the global automotive sector either, expecting demand for displays in cars to rise about 6 percent over the next four years.

If anything, he said customers wanted larger panel displays.

"LCDs are popping up in the middle of the consul. Displays are popping up on the back of head-rests and people want to play DVDs in the back of the car," he said.

(China Daily December 3, 2004)