Philips Semiconductor to Invest Up to $1 Billion in China Plant

Philips Electronics (PHG Quote) said its Philips Semiconductor unit plans to spend up to $1 billion on a new test and assembly plant in China.

The new plant will be built in eastern China's Suzhou Industrial Park and should help the company meet what it expects to be high demand for semiconductor chips, according to reports.

The facility, which should be completed by 2006, would create around 3,500 local jobs. Up to 500 of those jobs would be engineering posts.

Shares of Philips lost 85 cents, or 3.2%, to $25.40 in recent trading on the New York Stock Exchange.