South Korean tech giant Samsung Electronics has revealed plans to increase its investment in its Chinese memory chip factory in Xi'an from $7 billion to $8 billion. The increase in investment is meant to boost the factory's production of NAND flash memory chips to meet an expected rise in demand for the memory chips in the coming years.
The decision to boost its investment in its memory chip factory comes at the heels of the company's decision to close down its last smartphone factory in China. The closure was reportedly part of the company's wider strategy to reduce its risk amid the uncertainties brought about by the ongoing trade dispute between China and the United States.
According to Samsung, the decision to boost investments in its Chinese memory chip factory is due to its expectations of a possible rebound in the memory chip market next year. The South Korean company explained that the chip market will see a sharp increase in demand due to the rollout of next-generation devices that will take advantage of the rapidly developing 5G communications networks around the world.
Samsung also stated that there is currently a lack of supply for these types of chips and it aims to meet the demand by boosting its production capacity throughout its overseas facilities. Samsung is currently the world's largest producer of NAND flash memory chips, a type of chip that is used to hold permanent data. The chips are typically found inside smartphones, USB flash drives, solid-state drives, and memory cards.
Samsung's major rivals in the memory chip industry include South Korea's SK Hynix, and US-based companies Micron Technologies and Toshiba. Over the past few years, several Chinese firms have attempted to get into the memory business and to take a portion of the market share away from the global leaders. Unfortunately, most of the Chinese firms have not been successful in competing with their overseas rivals.
The only exception is Chinese firm Yangtze Memory Technologies Company, which announced last autumn that it was capable of mass-producing 64-layer 3D NAND chips. The advanced type of memory chip was previously only capable of being manufactured by leading industry players. The Chinese firm's announcement had marked an important milestone for the country's chip-making industry.
Samsung initially announced in 2017 that it would be pouring a significant amount of resources into its China-based facilities. This included a $10.8 billion investment into the establishment of a testing and packaging facility located near its memory chip production plant in Xi'an. Samsung originally stated that it would be investing $7 billion into its Xi'an facility over the next three years.
