EMC plans doubling of China investment
EMC Corp. of Hopkinton is doubling its big bet in China, making a billion-dollar bid to dominate that country's data storage business.
In Beijing yesterday, EMC chief executive Joseph Tucci said the company will invest $1 billion total in Chinese operations through 2012. That's twice its $500 million investment in June 2006.
Much of the 2006 investment went into a research and development center in Shanghai. The center quickly grew to 250 workers and has recently moved to a larger facility. "We've been so pleased with the success of our Shanghai center and with the continued growth of our customers' information infrastructure needs, that we're deepening our commitment to China," said Tucci.
He revealed the new investment at the opening of a second EMC research center, this one in Beijing. The new center will employ about 200 engineers and include a lab for advanced research in storage technology - the first such company lab outside the United States.
The new investment will also enable EMC to expand its sales and service operations in China, opening as many as 20 offices in the next five years, and to form alliances with up to 50 Chinese universities, to assist in training engineers. Tucci estimated EMC will employ about 1,000 Chinese by year-end, and 2,500 by 2009.
Laura DiDio, senior analyst at the Yankee Group in Boston, said EMC is moving to utilize China's large supply of technical experts. "They're churning out engineers very, very quickly," DiDio said, "and if he wants to be successful in Asia, you need a big Asian workforce."
Rick Villars, vice president of storage systems at IDC Corp. in Framingham, said EMC hopes to tap a big demand for improved storage technology at Chinese companies. He added that the Chinese government and businesses prefer to deal with foreign firms that make big investments in the local economy. "This is the kind of country where showing your commitment to the country is critical," Villars said.
Villars also speculated that EMC is gearing up for a future in which many of its storage hardware products are based on low-cost, mass-produced drives, enclosures, and circuit boards. China excels at such low-cost manufacturing, making it likely that country's electronics firms will become increasingly important EMC suppliers over the coming decade, Villars said.
Hiawatha Bray can be reached at bray@globe.com.
