(Yicai Global) Dec. 12 -- Chinese electronics maker Shenzhen MTC plans to build a high-end light-emitting diode plant in eastern China amid to satisfy a predicted rise in demand.

The firm will spend CNY1 billion (USD143 million) on the first phase of the factory in Nanchang, Jiangxi province, it said in a statement yesterday. The facility will have the capacity to make 1.2 million four-inch red and yellow LED chips a year and should go enter operations in 2020.

Shares in the company [SHE:002429] had surged  nearly 5.2 percent to CNY3.26 (46 US cents) as of 2.11 p.m.

LEDs that emit red and yellow light are more expensive than typical blue and green ones, which are mainly used for illumination, the statement added. Red and yellow LEDs are used in screens, headlights, infrared monitors, biometric identification and medical applications, and their use in the future display market is going to send demand skyrocketing, according to the firm.

MTC already runs China's biggest blue and green LED chip factory in Nanchang and expects the new facility will allow it to span the entire industrial chain while ramping up efficiency. The new factory will cover research and development, manufacturing and sales of intermediate and end-products.

Editor: James Boynton