Saturday, December 4, 2004
Philips to double China R&D staff
REUTERS
SHANGHAI: Dutch electronics firm Philips said on Wednesday it plans to almost double its research and development staff in China to 1,300 over the next two years, underscoring the country's growing clout as a technology centre.
Europe's biggest consumer electronics producer, Philips Electronics already employs 700 people at 15 China R&D centres.
Almost all of the new jobs will be created in Shanghai, a Philips official told Reuters.
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, told Reuters in a separate interview.
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 per cent of unit sales.
LCD screens everywhere
Hoskens said future growth, especially for more sophisticated displays, would be driven by the widespread use of the third-generation (3G) cellphones. "3G requires higher amounts of data, more pixels, more information. We need to create a huge technology innovation to be able to handle that," the 41 year-old said.
Philips, which also has manufacturing plants in Japan and Brazil, expects demand for mobile phones to rise by more than 12 per cent to 650 million this year.
Hoskens brushed aside talk of a slowdown despite analysts concerns that the global mobile phone handset sales market could rise less than 10 per cent next year, and that increased screen supply from rivals like Japan's Seiko Epson could add pressure to the mobile display business.
Philips has repeatedly said it was on track to double overall revenue from China to over ?12 billion ($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 per cent 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 six per cent 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.
Philips is also the world's biggest lighting maker, a top-three hospital-equipment maker, and Europe's number three in semiconductors.
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