Samsung makes extra $8 bln investment in NAND flash plant in China

13, Dec. 2019

Photo by Roman Spiridonov on Unsplash
Photo by Roman Spiridonov on Unsplash
SEOUL, AJU - With an injection of extra funds, Samsung Electronics will beef up the production of NAND flash memory chips at its only overseas microchip plant in China following the relocation of smartphone factories to Vietnam and India. The disclose of Samsung's new investment worth $8 billion comes as a trade war between Beijing and Washington.

According to Xian's municipal government, Samsung vice president Kang Bong-yong, a Samsung vice president in the sector of device solutions, told Xian's party secretary Wang Hao and city officials that Samsung would carry make an additional investment into its second plant in Xian without a hitch. The second plant will produce V-NAND flash chips.

3D NAND flash is a type of flash memory in which the memory cells are stacked vertically in multiple layers. Samsung was the first to mass-produce 3D NAND flash, under the name Vertical NAND (V-NAND), in 2013. There have been steady demands for NAND flash as customers look for smaller and powerful chips to fit them into mobile devices.

South Korea has envisaged a concerted state project to enhance the competitiveness of its microchip industry, citing a strong challenge from Chinese companies. In April, Samsung revealed a massive investment worth 133 trillion won by 2030 to strengthen its competitiveness in System LSI and foundry businesses, saying it aims to become the world leader in not only memory semiconductors but also logic chips. SK hynix is also building the world's largest semiconductor cluster in Yongin.

Despite fierce competition with Chinese companies, Samsung has made steady investments in Xian. Construction of the second Xian plant will be completed by the end of this year with a total investment of $15 billion.

Samsung's additional investment in Xian came after the company shut down its last remaining smartphone plant in Huizhou. Faced with rising labor costs, competition with domestic firms and a shrinking market share, Samsung has relocated its smartphone production base from China to Vietnam and India. In July last year, Samsung opened a new plant capable of producing 120 million smartphones per year in Noida in northern India. Samsung promised to use Vietnam as an R&D base to develop next-generation smartphones.