Samsung plans to build chip factory in China amid booming smartphone, tablet sales

Samsung has announced plans to build a Chip Plant in to meet the growing demands of China's booming technology market, awaiting approval from the South Korean government.
Written by Hana Stewart-Smith, Contributor on

Whilst demand for smartphones and consumer electronics weakens in the West, it continues to grow rapidly in China. Samsung announced today plans to build its first chip factory in the region to help meet demand.

Samsung is currently seeking approval from the South Korean government to build the plant, which they hope to begin construction on in 2012. The plant will make NAND flash memory chips to supply the growing market in China.

Samsung has not yet revealed how much they plan to invest, nor have they settled on a location for the plant. Reuters reports that the plant could cost in the region of $4 billion.

Samsung is the world's largest technology company by sales. If they are successful in their bid to begin construction, the plant will be the second plant the company owns outside of Korea.

Samsung only has one other international chip factory in Austin, Texas.

China took over from the U.S. as the world biggest smartphone market in the third quarter of this year -- making the decision by Samsung a timely investment.

Analyst Kim Young-Chan said that: "China is expected to overtake the United States as the top market for electronics products with its income levels growing."

Equally, the global NAND memory chip market is forecast for growth in the next year. Top chip price tracker DRAMeXchange predicts a growth of 20 percent to $26 billion over the next 12 months.

Samsung is currently the biggest NAND flash memory maker, with around 40 percent of the market, putting them ahead of Toshiba, Hynix Semiconductor, and Micron Technology.

"This new NAND flash memory line will enable us to meet fast growing demand from our customers and at the same time, strengthen our overall competitiveness in the memory industry," said Jun Dong-soo, president of Samsung's memory business.

Samsung's move towards China's booming electronics industry looks to be very fortunate, but other competitors have not been so lucky. Last week Japan's Toshiba announced closure of three of their chip plants in Japan, citing waning Western demand as a primary cause.


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