Verifone Inc., the leading supplier of point of sale terminals to U.S. retailers, will establish a manufacturing center in China.

The plant, which will be in Kunshan, near Shanghai, will produce a number of products designed to handle heavy card authorization traffic. The 180,000-square-foot facility will also produce products to be sold specifically in China.

Verifone expects the plant to begin operating in the fourth quarter, but it does not expect large-scale production from the site until mid-1995.

"Since the plant will be designed from the outset to be a seven-day factory, it will enable Verifone to apply even greater manufacturing cost efficiencies to our products," said James Palmer, vice president of operations at Verifone, which is based in Redwood City, Calif.

Second High-Volume Plant

The Kunshan site will be Verifone's second high-volume manufacturing site. A plant in Kaohsiung, Taiwan, has been producing Verifone's network systems products and such peripheral products as printers and personal identification number keypads since 1989.

This plant produces between 50,000 and 60,000 transaction automation systems a month.

Verifone officials said they chose Kunshan for the new plant in part because the workers there will share a common language with those in Taiwan.

Other criteria that affected the choice of Kunshan included availability of a competitive and trainable labor force, government incentives, and access to the Chinese market.

Currently, Verifone has supplied equipment for more than 10,000 transaction processing systems in China, where it has been selling transaction systems in China for three years.

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