Bloomberg News

Samsung to Build Flash Memory Factory in China to Meet Demand

December 06, 2011

Dec. 6 (Bloomberg) -- Samsung Electronics Co., the world’s largest maker of computer memory chips, plans to build a semiconductor factory in China to meet demand for flash memory used in smartphones and tablet computers.

The company aims to begin construction next year, with a target to start operations in 2013, Suwon, South Korea-based Samsung said today in a regulatory filing, which didn’t say how much money will be spent.

The factory will produce memory chips known as NAND flash used in mobile devices such as Apple Inc.’s iPad and may expand Samsung’s dominance in the $59 billion memory market. Demand for flash memory, used to store media including photos, videos and applications permanently, will climb 49 percent in the five years to 2015, according to IHS Inc.’s iSuppli.

The plant will “enable us to meet fast-growing demand from our customers and at the same time strengthen our overall competitiveness in the memory industry,” Jun Dong Soo, president of Samsung’s memory business, said in an e-mailed statement today.

Samsung is building the plant in China because the country is growing as a key chip market, according to the statement. The company is adding capacity while rival memory chipmakers are losing money because prices for DRAM chips, another type used in personal computers, have dropped to record lows.

The company submitted an application today to the South Korean government to get approval to build the plant, according to the statement.

Austin Plant

Samsung began operations at its latest factory in South Korea in September. The 12 trillion won ($10.6 billion) facility is the largest in the industry and can produce NAND flash chips as well as DRAM.

The company has a semiconductor plant in Austin, Texas, making both memory and logic chips, including application processors used in mobile phones.

Samsung began to operate the Austin factory’s logic-chip production line at full capacity in October, about five months after operations began, the South Korean company said in a separate statement today.

--Editors: Dave McCombs, Terje Langeland

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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