(Yicai Global) June 1 -- German pharmaceutical and high-performance materials giant Merck plans to spend CNY550 million (USD82.2 million) to build a semiconductor production base in China.

The new plant will produce semiconductor thin film materials and electronic specialty gases and include a chemicals warehouse and an operations center, Darmstadt-based Merck said in an announcement yesterday, citing the contract it signed with local authorities.

The 46,000-square-meter base will be built in the city of Zhangjiagang in Jiangsu province and will be operated by Merck Electronics. It is the unit’s largest single investment in China, Merck added.

The base will help to accelerate the rapid development of electronic tech business services for chipmakers, wafer foundries, packaging and testing firms in the Yangtze River Delta region, which accounts for half of China’s integrated circuit industry, according to Allan Gabor, Merck China president and managing director of Merck's China electronic business.

More than half of the world’s chips flow to the Chinese market every year, Gabor noted, adding that the country is the world's fastest-growing IC production center.

Merck unveiled a plan to double investment in China earlier this year. It expects to spend at least CNY1 billion (USD150 million) on its electronics business there by 2025 to focus on chip manufacturing.

Merck's electronics business runs three high-tech plants in Jinqiao and Waigaoqiao in Shanghai and in Suzhou, Jiangsu province, that make and market a wide range of display and semiconductor materials, electronic specialty gases, and safe delivery systems for high-purity chemicals.

Editors: Xu Wei, Futura Costaglione