(Yicai Global) Oct. 29 -- Heraeus Electronics will continue to up its investment in China, as it has long done. 

It has built new production lines and will put cultivate more talent for its newly completed innovation center in Shanghai, Frank Stietz, president of the Hanau, Germany-headquartered company, told Yicai Global at the completion and opening ceremony for its Shanghai innovation center on Oct. 26.

"Our aim is to provide more advice to clients at the inception of research and development, since only in this way can we achieve vertical integration of our products and customers," Wang Dongyi, director of innovation and R&D at Heraeus's Chinese unit, told Yicai Global.

The firm hopes to transform from a supplier of materials to a provider of material solutions and to solve clients' difficulties and satisfy their demands, Stietz said, adding that this is the reason for the company plumping for China as the birthplace of its new innovation center, which changes its original strategy of manufacturing 'in China' to that of implementing the combination of R&D and manufacturing 'for China' and 'with China.'

The country has a huge market with rapidly growing potential and its government is focusing ever more on developing technology companies, Stietz noted.

Shanghai attracts a large number of clients and also has abundant academic and labor resources, Stietz explained. The city is still quite advantageous in its comprehensive strength despite high operating costs.

Local policy is also supportive, and this has lured many international firms to Shanghai. Many have built R&D centers in the city. To set up a new innovation center in town for its Chinese clients was thus also an investment decision the firm made, he said.

The company's electronic business in China consists of two main lines, which are integrated circuit packaging and power electronics. The former provides materials for packaging in the semiconductor sector while the latter is to be a material supplier in the electric vehicle market. China is undergoing rapid development in both fields, Stietz told Yicai Global.

Heraeus' European unit is mainly in charge of R&D. The completion of Shanghai's innovation center means the company will transfer more of this to China to develop products that cater to the domestic market.

Devices in the company's newly-built Shanghai innovation center can directly pick up chips with 250-micrometer diameter from a wafer and install them. It currently owns 18 advanced facilities and has 10 staffs for research and development, with these set to further expand.

Shanghai's innovation center can randomly combine complex testing techniques to satisfy clients' demands.

Heraeus Electronics has been in China for over 40 years and has 20 units with over 2,600 employees. The Chinese market contributed about 30 percent to its total global revenue of EUR21.8 billion (USD24.8 billion) in the last fiscal year.

Editor: Ben Armour