Matsushita is investing ¥130bn (£653m) to build a semiconductor facility to make chips for DVDs, digital TVs, mobile communications equipment, SD memory cards and network-related equipment.
The Japanese manufacturer, best known for its Panasonic brand, said that construction of the facility will begin in May, with a production start date aimed for the end of 2005.
The facility will be equipped with a 90-nanometer production process for 300mm wafers, with plans to eventually upgrade the production processes to 65-nanometers.
While most commercial semiconductor plants use advanced 90-nanometer processing, by upgrading to 65-nanometer processes the company will be able to make smaller chips suitable for smaller electronic products.
Investment in the expanded production of advanced system, large-scale integrated circuit chips meets with Matsushita's goal of targeting the digital home electronics market.
Scarlet Pruitt writes for IDG News Service