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September 13, 2012

Samsung breaks ground on new $7bn chip manufacturing facility in China

New facility is largest abroad investment on a semiconductor facility

By CBR Staff Writer

South Korean technology giant Samsung has begun the construction of $7bn memory chips manufacturing facility in North Western China’s Xi’an region.

Being built at Xi’an Hi-Tech Industrial Development Zone, the project is claimed to be Samsung’s single largest overseas investment on a semiconductor plant.

According to the firm, following the completion of the initial phase of the project with an investment of $2.3bn by 2013, the plant will have a capacity of producing 100,000 10-nano-level NAND flash memory chips per month and annual sales of CNY66bn ($10.4bn)from 2014.

The chips produced at the facility will be mainly used in smartphones, tablet PCs and MP3 players.

In the interim, the rising demand for NAND flash memory chips in the Chinese market is an additional factor responsible for the selection of China as a new investment location.

The construction follows the approval from South Korean Government, which would also offer regular security consultancy to avert revealing of any technology.

Although a major vendor of smartphones, the Korean firm is also a mobile component manufacturer, which manufactures processors and memory and its customers include Apple.

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However, the US based iPhone maker has cut its memory chips orders from the Samsung in a bid to expand supply lines and reduce dependence.

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