Hitachi GST is going to build a $500 million "mega manufacturing centre" next to its two existing hard-disk plants in China to steal what it says will be a huge boom in consumer electronics in years to come.

Construction will begin later this year in Shenzhen and it will go into production in late 2005, initially manufacturing 3.5in hard disks, the company's COO Glenn Lanerd said. The new centre will employ 7,000 people - nearly double the 4,500 that work in both existing factories.

Ultimately however, the 35,000 square-metre plant will produce an array of different hard disks "giving Hitachi GST the flexibility required to meet future demand in the traditional IT and consumer segments", it said. The factory will come equipped with the very latest technologies, it promised.

"Today's announcement further demonstrates Hitachi's commitment to China and positions us to play a leading role in the rapid growth of its information technology and consumer electronic industries," said Hitachi GST's head Jun Naruse. He also mentioned the "continued support of local government officials, who made Shenzhen an attractive location for the new manufacturing site."

The new site will enable the company to build the entire disks on one site and so make huge cost savings (final assembly is currently done in the Philippines or Thailand). This, the company explained, will put it in the ideal position to take advantage of what it predicts will be double-digit growth in the market in the next few years, mostly due to a "rapid adoption of disk drive technology in consumer electronics applications". By that, it means the one-inch disks that have become so popular in digital music players and the 2.5in disks that feature in items such as digital video recorders.

If all goes according to plan, Hitachi is hoping to steal the market lead away from Seagate.