The software allows designers a virtual view inside an engine
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A company said to be at the cutting edge of computer software has created 40 jobs near Bangor.
Technium CAST specialises in building "virtual" prototypes which save time and money during a design process.
The work is in partnership with IBM and the University of Wales, Bangor.
Enterprise Minister Andrew Davies said the decision by Technium CAST (Centre for Advanced Software Technology) decision was a "huge vote of confidence in Bangor".
"This is really at the cutting edge of technology, particularly in software development - speed is of the essence here and this company will create wealth and create employment locally," said Mr Davies.
The company's work in visualisation technology is used to create "virtual" tours of new developments, such as a new aeroplane or the inside of an engine.
Andrew Davies says speed is of the essence in the business
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The software allows designers to create a 3D model on a computer screen, allowing them to assess how a design will perform without having to build a full-scale model.
IBM will supply more £600,000 worth of specialist IT equipment to support the work at the Bangor centre.
The University of Wales in Bangor will also benefit from connections with the company, said college vice-chancellor Professor Merfyn Jones.
"This work is of worldwide importance and the movement backwards and forwards between the university and industry is extremely important, allowing students and staff to be at the cutting edge of technology," he added.