Samsung begins building $7 billion chip line in China

Samsung Electronics' second line in Xi'an, China, will make V-NANDs meet high demand in the world's second-largest economy.

Samsung Electronics has begun construction of its second semiconductor line in Xi'an, China.

The South Korean tech giant will invest $7 billion in the new line that is expected to be completed next year.

It will produce V-NAND memory chips, which are in very high demand from Chinese vendors.

The company signed a memorandum of understanding (MoU) to build the line back in August 2017, with Shanxi Province.

Samsung began building its first chip line in Xi'an -- Chinese President Xi Jinping's hometown -- back in 2012. It began producing NAND in 2014 and has grown to account for 20 percent of the South Korean firm's total NAND production. The first line is also being expanded with additional investments.

The South Korean tech giant is squeezing rivals with its massive production output while remaining ahead in the rollout of latest products. Its Pyeongtaek line began production last year.

The Chinese government has given rare benefits to Samsung due to the high demand for memory in the mainland.

The Korean firm enjoys the one-stop administrative support and its chip business is a wholly owned subsidiary. the Chinese government usually asks for 50/50 joint ventures for companies on the mainland.

The Chinese government has reportedly told the US that it will purchase more semiconductors from the latter, instead of South Korea and Japan. China and the US are embroiled in a trade dispute, with US President Donald Trump initiating tariffs on Chinese products and restricting Chinese investment in technology "deemed important" to US interests

However, Samsung has near 50 percent market share in NAND, and China has few alternatives for memory chips.

China has vowed to become memory independent going forward. The state-backed Tsinghua Unigroup is investing billions in semiconductors and actively pursuing high-tech firms abroad.

SOURCE BY