American mobile chip maker Qualcomm Inc. will build a factory in Taiwan to produce display panels used in mobile phones and electronic readers, Taiwan's government said Tuesday.

The investment of nearly $1 billion will help boost Taiwan's display panel industry as it faces increasing competition from South Korea, China and Japan, the Economics Ministry said on its website.

The San Diego-based chip maker has long collaborated with Taiwanese high-tech firms, including HTC Corp. and Taiwan Semiconductor Manufacturing Co.

The new plant, to be located in Hsinchu in northern Taiwan, will use the new power-saving Mirasol technology that, unlike conventional mobile devices, allows reading under sunlight, the ministry said.

Qualcomm began collaborating with Taiwan's Cheng Uei Precision Industry in 2009 to develop Mirasol electronic papers for e-readers.

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