IBM and Great Wall group launch $25 million venture
IBM and Great Wall group launch $25 million venture
BEIJING (Reuters): U.S. computer giant IBM Corp and China Great Wall Computer Group announced on Tuesday the launch of a US$25 million plant in Beijing to make circuit boards for Nokia Corp mobile phones.
The joint venture signals an opportunity for electronics firms to cash in on China's booming wireless market as Beijing requires cell phone makers to buy their components domestically.
The plant, called Beijing GKI Electronics Co Ltd, has already been built in a new technology park developed by Nokia and will begin delivering printed circuit cards early next year, Henry Chow, chairman of the IBM Greater China Group, told reporters.
It is owned 70 percent by IBM China and 30 percent by Great Wall Shenzhen Co, and is similar to a profitable circuit board plant operated by the partners since 1995 in the southern city of Shenzhen, Chow said.
That plant, called Shenzhen GKI, manufactures circuit boards mainly for personal computers. Both plants have flexible assembly lines capable of producing boards for all sorts of electronics customers, he said.
"The combination of the Beijing and Shenzhen capacity will allow us to produce a million cards a month," Chow said.
The initial focus would be on cards for Nokia, he said.
Ventures supplying mobile phone manufacturers are likely to multiply in China as its rapid growth in mobile phone sales, twinned with strict Chinese import quotas, drive foreign wireless companies to localize every aspect of their production lines.
On Monday, U.S. telecoms equipment maker Motorola Inc said it has become the largest foreign investor in China with approval to invest $1.9 billion in a massive new silicon chip-making complex and factory expansion in Tianjin
In May, Nokia broke ground on the vast Xingwang International Industrial Park in Beijing, which it and the Chinese government hope will lure $1.2 billion in investment from foreign and Chinese suppliers to Nokia.
The new venture between IBM and Great Wall is the first tenant in the park besides Nokia, which has made the 40-hectare (100 acre) campus home to its largest plant in China.
Beijing, in an attempt to master foreign technology which would help it beef up state-owned telecoms companies and create jobs, enforces strict quotas on imported mobile equipment.
It requires foreign manufacturers to localize assembly of handsets and network gear in exchange for share of the market -- the world's second largest with more than 56 million subscribers.
But increasingly, Beijing is requiring phone makers to localize not only assembly, but sources of components as well.