Chinese chip-packaging and testing giant Jiangsu Changjiang Electronics Technology (JCET) says it will invest 7.8 billion yuan (US$1.15 billion) to build a new plant, as demand for home-grown chips continues to surge amid the rapid development of artificial intelligence.

A controlled subsidiary with a registered capital of 4 billion yuan would be set up to construct an advanced packaging and testing factory in the Lin-gang Special Area in Shanghai, the company said on Wednesday.

The project will be rolled out in two phases, with the first – covering factory construction and equipment investment – scheduled for completion in the second half of 2028.

JCET, based in China’s eastern Jiangsu province, said the move was aimed at accelerating the expansion of its “high-end” advanced-packaging capacity and enhancing the company’s overall competitiveness.

Advanced packaging – the final step in chip production that involves assembling individual dies into finished products – has become critical to China’s chipmaking capabilities, especially as Washington’s export controls restrict access to advanced manufacturing foundries such as Taiwan Semiconductor Manufacturing Company.

JCET’s Shanghai-listed shares have surged 147 per cent since the beginning of the year on the back of strong growth.