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Motorola expands in China
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August 21, 2000: 2:33 p.m. ET
Bulk of $1.9B investment will go toward building semiconductor plant
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Extending its reach into the burgeoning market for telecommunications and electronics, Motorola Inc. said Monday the Chinese government has cleared the way for an additional $1.9 billion investment there.
Roughly $1.45 billion of that will be used to build a new semiconductor manufacturing plant and the remainder has been earmarked to expand its handset manufacturing plant, both in the port city of Tianjin, Motorola spokesman Steve Goodyear said.
The move underscores the Shaumburg, Ill.-based company's efforts in the Chinese market and makes it one of the largest foreign technology investors in the country, Goodyear said.
"This is just one more step in our overall strategy and development of the China market," he added.
Motorola has been building its presence in China since 1987. The company also was one of the strongest corporate supporters of federal legislation to normalize trade relations with China, pouring millions into its lobbying efforts to make sure the measure was passed.
The U.S. House passed that bill in May. The Senate is expected to consider the measure when it reconvenes in early September.
Click here for CNNfn.com's special report on China trade
The latest expenditure brings the company's total investment in China to $3.4 billion. And the country is becoming an increasingly important part of Motorola's overall business. Roughly 10 percent of Motorola's $33 billion in 1999 revenue came from its China operations, Goodyear said.
"Clearly, the China market has become a significant contributor to our business. And we expect, given the growth potential in China, that it will continue to be a very significant part of our overall operations," he said.
 Motorola, already the largest supplier of wireless phones in China, aims to lock in on the burgeoning market for its products there. Already the leading supplier of cellular phones in China, the company hopes to build its lead in that market, as well as the market for semiconductor products.
The company expects the number of wireless subscribers to rise from 68 million in 2000 to nearly 250 million in 2004.
Meanwhile, Motorola said the Chinese market for semiconductors is growing at 17 percent per year and is expected to reach $18 billion by 2004. The company expects the convergence of computer, communications and consumer markets in China to drive the market demand for digital products from its semiconductor plants there.
Motorola (MOT: Research, Estimates) shares edged down 5/16 to 35-15/16 in New York Stock Exchange trade early Monday afternoon. 
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