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Samsung spends $15 billion to grow Chinese semiconductor presence

Samsung Memory
Samsung Memory (Image credit: Samsung Semiconductor)

What you need to know

  • Samsung will invest $15 billion in a semiconductor plant in Xi'an, China.
  • The first $7 billion phase will be completed by 2020.
  • The second phase will be ready by the end of 2021.

Samsung will invest up to $15 billion to expand a semiconductor factory in Xi'an in Northwest China's Shaanxi Province, according to SamMobile. The factory was opened by Samsung Semiconductor in 2014 as the company jockeyed for position with Intel's semiconductor group. Samsung produces more memory chips than Intel, while Intel's overall semiconductor business is larger. Samsung expects the first phase of development, with a $7 billion initial investment, will be operational by March 2020. The second phase of development will take until the second half of 2021 to complete.

The move helps Samsung compete not only with Intel in the global memory and semiconductor market, but also gives Samsung more of a foothold in Chinese manufacturing. Chinese news source Xinhua says that Xi'an has been looking to attract technology and information companies. Samsung phones are popular in China, but the company has lost dominance to local companies like Oppo and its affiliated brands, as well as Huawei.

Samsung Semiconductor acts as a separate company from Samsung's mobile phone division, with a corporate firewall ensuring fairness as Samsung sells memory to competing manufacturers. The company handles much of its semiconductor manufacturing in Korea, but also has two plants in China and one in Austin, TX.