HDS, a supplier of digital storage products and solutions, said it will use the enterprise, which has a registered capital of US$6.3 million, as a base to increase investment in China and offer more comprehensive solutions and services to its local customers and partners.

HDS first entered the Chinese market in 2001 and currently has representative offices in major cities such as Beijing, Shanghai, Guangzhou, Chengdu, Hangzhou and Nanchang.

Francis Ko, general manager of HDS China, said the subsidiary's new enterprise aims to also establish its own subsidiaries in Shanghai, Guangzhou and Chengdu.

"We have already achieved enormous success in the Chinese market through close and effective co-operation with local partners in the past five years," said Ko.

"As a real business entity now, we can fully use the strength of our business network across China and continue to invest in this market."

According to Beijing-based research house Analysys International, the storage equipment market in China in the fourth quarter of last year was worth 1.99 billion yuan (US$249 million), increasing 16.4 per cent year-on-year.

The rapidly growing information technology market has spurred surging demands for storage solutions.

"We foresee the demand for storage in China undergoing an unbelievable increase," said Ko.

Telecom and finance companies as well as government agencies are believed to be the biggest buyers of storage gear and solutions.

Chinese telecom operators' ongoing efforts to build next generation networks, as well as the increasing opening of the financial sector, are expected to be major contributors to the growth of the storage market in the coming years.

To cash in on the opportunities, major storage solution providers have been increasing their investment in China. In June, US-based EMC Corp, the world's largest provider of data storage and information management solutions, announced a US$500 million investment in China within five years.

A large portion of the money will be spent on research and development, according to Chairman and Chief Executive Officer Joseph Tucci.

HDS expects to record double-digit annual sales growth in China.

(China Daily 09/12/2006 page10)

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