(Yicai Global) May 17 -- Keystone Technology, a Chinese maker of electronic components that counts display giant Boe Technology Group as one of its customers, intends to invest CNY2 billion (USD63.6 million) to enter the sector of photomasks to better serve its existing clients.

The company will construct a factory in Qianwan New District in eastern China's Ningbo to make photomasks that are used in the manufacturing of semiconductor displays of mature nodes ranging from 28nm to 45nm, the Nanjing-based firm said in a statement yesterday, citing an agreement with a district manager. Construction of the plant should take five years.

Applying photomasks is one of the core processes to make semiconductors and display panels. Keystone's first foray into the business of such image-transferring tools should help the firm disperse its operating risks, enhance its profitability, and better meet diverse demands stemming from its clients that are mostly display panel makers, it explained.

However, there are potential technical obstacles as most of the key equipment of the plant will be imported and procurement takes time and there are potential risks of trade barriers, Keystone added.

The new investment scheme failed to buoy Keystone's stock price [SHA: 605588] as it closed down 2.3 percent at CNY36.99 (USD5.30).

Editor: Emmi Laine, Xiao Yi