Samsung Electronics Co. (005930.SE) has been given approval by the South Korean government to build a new flash memory manufacturing plant in China, which will give the electronics giant a major foothold in the country expected to become the world's largest market for high-tech electronics in a few years.
The plant, which will make NAND flash memory chips mainly for music players and handsets, will have the capacity to produce 100,000 wafers per month, The Ministry of Knowledge Economy said in a statement Wednesday. The Ministry didn't mention the value of the new plant or where it would be located, and a Samsung spokesman declined to provide details.
Construction of the plant, which still needs approval by the Chinese government, is due to start within the next six months, with production scheduled to begin in the second half of next year.
As part of the conditions for approving the plant, the government has requested that Samsung put in place measures to protect any possible leakage of one of South Korea's key technologies.
"We are committed to fully cooperate and comply with the government's request (to ensure the security of our technology) and will try our best to efficiently meet the consumer demand (for flash chips) through this new plant," the Samsung spokesman told Dow Jones Newswires.
Establishing the plant in China, which will be its first manufacturing base for semiconductors there, will give Samsung better access to an increasingly important market for tech products. China is expected to become the world's largest market for high-tech electronics, such as smartphones, tablets and flat-screen TVs in a few years.
The global NAND flash memory chip market is estimated to grow to $29 billion this year, and China is expected to account for around 50% of that market, according to industry research firm Gartner.