Samsung starts building a US$7 billion chip line in China

Back in 2012, Samsung started to build its first chip line in the hometown of Chinese president Xi Jinping, Xi'an. Two years later, that line was already pumping out NAND chips and, since then, it managed to reach an output level equivalent with about 20 percent of Samsung's entire NAND production.

The second line is expected to be ready before the end of 2019 and Samsung plans to invest no less than US$7 billion in its construction, which has just begun. Next to it, the first NAND production line we mentioned earlier will also receive various investments deemed to increase its output.

Samsung currently controls about 50 percent of the global NAND market and, due to the ever-increasing demand for such chips in China, the local government provided the company with rare benefits. In most cases, then companies want to establish manufacturing facilities in China, the government asks for 50/50 joint ventures to allow this. However, Samsung managed to start its Chinese chip manufacturing business as a wholly-owned subsidiary (and to keep it this way until now).

Last summer, Samsung began producing NAND chips at its largest ever semiconductor plant. That facility, located in Pyeongtaek, takes care of multiple global customers — including Apple — but it also ships NAND chips to various Chinese companies.