Matsushita will spend 50 million dollars to manufacture charge coupled device (CCD) image sensors, which are in effect the 'eyes' of many electronic products such as digital cameras.

The new program will be the first time a Japanese manufacturer has produced CCDs outside of Japan, the company said in a statement.

Matsushita Semiconductor Co. (MEISC) will also become the first company to build CCDs in Singapore, it said.

The remaining 100 million dollars, to be spent over the next three to five years, will go towards expanding current production capacity of large scale integration (LSI) and other devices for DVDs, MDs and CDs, as well as research and development.

MEISC said it expected to exceed a recent Semiconductor Industry Association forecast of 9.8 percent compound growth between 2003 and 2006, mainly due to the transfer of production from its parent company.

"We are expecting a three-fold sales increase over the next three to five years and, in order to meet such demand, we are planning to increase production of existing products," MEISC vice president Yukio Furuta said.

Furuta said the company's local workforce would increase by 60 percent over the next three to five years, which another official said equated to 400 new jobs.

Singaporean officials hailed the announcement, which is a timely boost for the stagnant economy as it struggles through near record unemployment levels.

"This is the first time that the production of CCD image sensors, which requires a highly skilled workforce, is done outside of Japan by a Japanese manufacturer," Singapore Economic Development Board managing director Ko Khen Hwa said.

"Matsushita's investment is therefore yet another clear vote of confidence in the competitiveness of both the electronics industry and the manufacturing sector in Singapore."

Matsushita is well known globally for its Panasonic, National and Technics brands.

SPACE.WIRE