[THE INVESTOR] Samsung Electronics has recently decided to add a new production line for 3-D NAND flash chips at its plant in Xian, China, with aims to start operations from 2019, industry sources said on May 29.

The Korean tech giant is reportedly in talks with the local government for the latest expansion and plans to invest up to 10 trillion won (US$8.93 billion).

“Samsung and the local government are finalizing the talks. The construction is likely to start in September,” an industry source said. 

The current Line 1 at the Xian plant, established in 2014, produces 120,000 NAND flash sheets per month. Following the planned expansion of Line 2, the production capacity will reach 200,000 units.

Samsung, the world’s largest memory chipmaker, is the market leader in NAND production with more than 60 percent market share. The company aims to further strengthen its leadership as its smaller rivals such as SK hynix and Micron are pouring considerable resources into the production of NAND chips whose demand is soaring recently for long-term storage for Internet of Things, cloud and big data services.

Samsung also plans to start operations at its brand new NAND plant in Pyeongtaek, Gyeonggi Province, which has a production capacity of a monthly 200,000 sheets, possibly from June. While the Chinese plant will produce lower-end chips mostly for Chinese handset makers, the Korean plant will focus on more advanced, high-end chips.

By Lee Ji-yoon (jylee@heraldcorp.com)