Motorola Inc, the world's ninth-largest chipmaker, said it has slowed expansion of a chip plant in China again after overestimating demand.
The plant in Tianjin is equipped to make about 6 percent of its total capacity after Motorola started building it in 1995.
The plant missed a 1997 target for production and in 2001 Motorola said it expected the plant to be running at full capacity last year.
Motorola has invested US$1 billion of a total US$1.9 billion the company originally budgeted for the plant.
Most of China's US$15 billion chip market can be supplied by imports, the company said.
"The China market hasn't skyrocketed," said Bill Walker, general manager of Motorola's chip unit. "Demand for leading-edge chips will be slow to grow in China."
Motorola, the No. 2 cellphone maker, and Dell Computer, the No. 2 maker of personal computers, have shifted more of their manufacturing to China to tap the world's biggest handset market and the second largest for PCs.
Local chipmakers, which supply about a tenth of China's demand for chips, mainly make semiconductors for consumer products.
Applied Materials Inc, the world's biggest producer of chip-making equipment, has said it expects China and Taiwan to make two-fifths of the world's chips by 2010. Taiwanese companies currently make about a fifth.
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