Seagate Technology said the investment would make the Londonderry facility “the global technology leader in the production of read-write heads for hard disc drives”.

The company said the investment, which is expected to be completed in 2010, will go into new equipment, research and development, infrastructure and IT systems that will enable the factory to retain its position as the lowest cost and biggest producer of read-write heads in the world. Despite the investment, no jobs will be created at the Londonderry plant which employs 1,400.

Last October, Seagate announced it was to close its Limavady factory with the loss of 900 jobs.

Redundancy terms of six weeks' pay for every year served were offered to those who stayed on until closure which takes place in a few weeks, and two weeks less to those who left ahead of final closure. Seagate did not mention the closure or redundancies when announcing the investment which came on the eve of today’s July 4th celebrations in the US.

John Spangler, vice-president at the plant in Londonderry’s Springtown, said: “Springtown is already one of the leading producers of read-write heads in the world and is the primary supplier of heads for Seagate – this is a position that will be enhanced by this new investment.”

Mr Spangler said the success of the factory since it started production in 1994 and its continued success into the future was evidence of Northern Ireland’s capacity to compete in the global marketplace.

“Northern Ireland has all of the right ingredients, including a business friendly environment, a wealth of talent from a well-educated, flexible and committed workforce, and an understanding of the importance of the knowledge-based sector for future economic development,” said Mr Spangler.

“These are messages I was happy to bring to the US-NI Investment Conference held in Belfast in May.”

However, desite Mr Spangler’s words of support for Northern Ireland, the closure of the Limavady plant was announced just weeks before Seagate opened a new facility in the low wage economy of Malaysia – and where it makes the same products as in Limavady.

Seagate, has received in the region of £12 million from Invest Northern Ireland and its predecessor, the Industrial Development Board, since 2001.

The Northern Ireland Executive is understood to have been trying to get back some of the many millions of grant aid it had provided towards the Limavady plant.

Alliance enterprise spokesperson Sean Neeson MLA welcomed the investment by Seagate in their Londonderry site but said he would prefer to see jobs being created instead.

“The fact that they are investing £120 million shows that they have a long-term plan for the Springtown site in Londonderry at this uncertain time as regards the global economy.

“I would however have preferred that instead of merely announcing new equipment and infrastructure, they were announcing new jobs.