A US giant has given a huge vote of confidence in Scotland’s electronic engineering expertise with plans to invest £47 million upgrading a remnant of the Silicon Glen heyday of the industry.

Diodes Incorporated intends to beef up the Greenock semiconductor manufacturing plant it acquired from Texas Instruments last year under plans to make it a centre for the development of sophisticated chips.

The company has won £13.7 million official support from Scottish Enterprise towards the cost of a programme that is expected to underpin the long-term future of a plant that employs 300 people.

The investment is being made despite uncertainty about Brexit.

It will provide a huge boost for Greenock. The outlook for employment at the plant had appeared bleak after Texas Instruments announced plans in January 2016 to close the facility.

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Texas decided to move production to more modern facilities overseas, in which it expected production costs to be lower.

The decision followed a long period of decline for the once mighty electronics manufacturing industry in Scotland. This was decimated by competition from what were regarded as low-cost economies.

However, Diodes defied the view that the Greenock plant was too old and small to be able to compete in the fast-moving global market for computer chips.

The company has been capitalising on strong demand for chips for use in industries ranging from mobile electronics to car production.

Tim Monaghan, Diodes’ European President, said the company had made good progress at the plant since buying the facility, which is known as GFAB.

He added: “With Diodes’ expertise, the high calibre of the GFAB workforce, and support from Scottish Enterprise, I am excited by the opportunity we are creating to progress even further, building on our manufacturing capabilities to create a centre of process development excellence.”

After visiting the Greenock plant yesterday, First Minister Nicola Sturgeon applauded Diodes for showing faith in its Greenock workforce and underlined the wider significance of the investment.

“The Scottish Enterprise funding reinforces Inverclyde’s prominence as an important area for manufacturing and business,” she said.

Scottish Enterprise chief executive Steve Dunlop said the investment Diodes plans to make in Greenock should ensure the company stays at the forefront of the industry as well as remaining an integral part of the local community.

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Inverclyde Council has provided £169,500 to support the development of the site, amid hopes other businesses will see the appeal of investing in the area.

Diodes’ investment in Greenock comes after a long period of decline in Scotland’s electronics industry, which has taken a heavy toll on the Central Belt.

A range of overseas corporations established manufacturing facilities in Scotland in the post war years. Many shifted production overseas or refocused on services activity amid the globalisation process which gathered pace in the 1990s.

The Motorola mobile phone factory at Bathgate closed in 2001 with the loss of 3,000 jobs.

US computer giant IBM operated a huge manufacturing plant at Greenock which employed 5,500 at its peak. The facility closed in 2016, 12 years after IBM sold its personal computer-making business to China’s Lenovo as it focused on technology services.

Greenock businessmen Sandy and James Easdale are planning to complete a £100m development featuring homes and business facilities on the Spango Valley site, which they bought in 2018.

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The site operated by Diodes was opened by National Semiconductor in 1970. Texas Instruments bought NatSemi in 2011.

With headquarters in Texas, Diodes has operations around the world. After posting record third quarter revenues of $323m in November the company said it was well positioned to deliver profitable growth, with a focus on content gains in high-growth areas such as connected cars and high-end servers.

It has other chip manufacturing operations in Lancashire and in Shanghai.

The chief executive of digital technolgy sector champion ScotlandIS, Jane Morrison-Ross, said of Diodes' plans for Greenock: “Given the history of Inverclyde and the importance that companies such as IBM previously had to the region, this will no doubt create positive employment and development opportunities for the area. The investment will be a welcome boost to the economy, facilitating both skills development and new jobs.”

Scottish Enterprise said it is providing a £12m research and development grant towards a five-year project to develop more technologically-advanced transistors and £1.7m towards a training programme to enable employees to support this change.