Samsung Handles US$3.5 Billion to Lugai Semiconductor Factory

South Korea’s Samsung Electronics has a big move in China! South Korean media reported that Samsung plans to invest approximately US$3.5 billion to set up a chip factory in China and start operations in 2013. According to a company’s regulatory filing, the factory will use advanced 20-nanometer technology to produce NAND flash memory chips.

In the past, the Chinese government has always used the "technology-for-market" strategy to attract all countries to leave high-tech and R & D in China. However, the industry is afraid of technological outflows, and the most advanced technology has always remained in the home country. Although China is today the world's factory, most of the technologies it absorbs are already mature or are about to be replaced. Today, Samsung Electronics has introduced advanced technology and invested heavily in flash memory factories in China. The significance behind this is particularly interesting.

According to South Korean media reports, Samsung Electronics stated yesterday (6th) that it has decided to establish a factory in China and begin production of NAND flash memory chips in 2013. According to the report, Samsung’s move aims to seek to seize the opportunities for the rapid development of smartphones and tablet computers. Future Samsung's flash memory chip production line will adopt advanced 20-nanometer manufacturing process, but did not disclose the new factory's address and the specific investment amount.

The report mentioned that if the factory plan is approved by the Chinese authorities, the plant will be Samsung’s second overseas chip manufacturing plant following Austin, Texas, and Samsung plans to establish a flat panel display screen production base in China.

Kim Yong-can, an analyst at South Korea's Shinhan Investment Co., predicts that Samsung will invest 4 trillion won (about 3.5 billion U.S. dollars) to 5 trillion won for a new plant in China.

According to the report, Samsung stated that it has submitted an application to the South Korean government for its foreign investment in construction and production bases. The latter asked Samsung to submit a similar application, which is mainly concerned with the leakage of valuable high-tech technology.

Samsung’s only overseas chip factory is located in Austin, Texas. Samsung Electronics said yesterday that the “S2 production line” at the system LSI semiconductor manufacturing plant built in Austin has been completed one month ahead of schedule and has begun production. The S2 production line that produces 45nm logic circuit chips has a capacity of 40,000 pieces per month.

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