UPDATE 1-France takes 8 percent Gemalto stake

* Strategic investment fund FSI buys 8 pct of Gemalto

* FSI to ask for one Gemalto board seat

(adds details)

PARIS, May 29 (Reuters) - The French state bought a stake in digital security firm Gemalto (GTO.PA) and said it wanted one representative on the board of the company to help back the group's profitable growth strategy.

The strategic investment fund (FSI), created last November to notably help key domestic companies survive the financial crisis, bought a stake of around 8 percent in Gemalto from TPG Capital for close to 160 million euros, the statement said.

Gemalto, which makes smart cards, electronic passports and provides online security services, employs 10,000 people and achieved 2008 revenues of 1.68 billion euros.

The FSI said the investment was at the core of its strategic mission as Gemalto played "A key role in making the French economy competitive and was ideally positioned in the digital and mobile world to achieve growth in coming years".

Gemalto's 2008 operating margin roughly doubled to 10.1 percent, meeting its target one year in advance.

In April it reiterated its goal for an adjusted operating margin of above 10 percent in 2009.

The shares have gained nearly 29 percent this year, giving it a market capitalisation of 2 billion euros.

(Reporting by Dominique Vidalon, editing by Marcel Michelson)