The new production facility, based in Shenzhen, South China's Guangdong Province, is the first phase of the storage giant's US$500 million investment for projects in China.

Hitachi's new centre, called Hitachi Global Storage Products (Shenzhen) Co Ltd, places the entire supply chain of HDD production in a central location, a concept that is designed to achieve greater production efficiency and control costs.

"It is a significant milestone for us, a milestone that allows Hitachi to focus on meeting market and customer needs expeditiously," said Hiroaki Nakanishi, chief executive officer of Hitachi Global Storage Technology, at the opening ceremony yesterday.

"Creating end-to-end production capability in a single region is an innovative approach to drive localized sourcing and to shorten lead times, reduce transportation expenses and will enable us to respond quickly to market needs," said Dirk Thomas, president of Greater China, Hitachi Global Storage Technologies.

The new facility, which has cost US$100 million so far, will initially produce 3.5-inch hard disk drivers and will be capable of assembling HDDs in varying segments, an arrangement that company CEO Hiroaki Nakanishi said would give Hitachi "flexibility" to meet the market needs.

The increased capacity from the new production centre will help Hitachi to increase its market share in the Chinese HDD market, which is booming along with its surging economy.

"Due to supply constraint, (our) market share (in China) is not sufficient for us in the past years," Nakanishi said.

"We are very much encouraged to invest to increase our output to meet the demands in China," he said, noting the new Shenzhen facility will hopefully alleviate the "supply constraint" the company suffered before.

(Source: China Daily)