S. Korea approves Samsung's flash chip plant in China

SEOUL Tue Jan 3, 2012 6:46pm EST

Students walk out of a showroom at the headquarters of Samsung Electronics in Seoul October 28, 2011. REUTERS/Jo Yong-Hak

Students walk out of a showroom at the headquarters of Samsung Electronics in Seoul October 28, 2011.

Credit: Reuters/Jo Yong-Hak

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SEOUL (Reuters) - South Korea said on Wednesday it had approved a plan by Samsung Electronics Co to build a flash memory chip plant in China seen costing some $4 billion, as a boom in smartphones and tablet computers fuels the chip industry's growth.

The plant would be Samsung's second overseas chip manufacturing site and reflects the growing importance of the Chinese market.

China's consumption of NAND-type flash memory chips is set to account for half the global flash market, estimated at $29 billion this year, and its portion will rise to 55 percent by 2015, according to research firm Gartner.

The stellar growth is being driven by Chinese manufacturers such as Huawei Technologies and ZTE Corp, which have been steadily raising their global smartphone and tablet market share.

The new production line by Samsung will use cutting-edge 20-nanometer-class or below processing technology and mass production is planned to start from late 2013.

Samsung has yet to decide on a site for the plant, which will have a capacity of 100,000 wafers per month.

South Korea requires local firms to apply to build foreign production bases for fear of leakages of the country's prized high technology.

The Ministry of Knowledge and Economy said in a statement that Samsung would set up a committee to prevent potential technology leaks.

Samsung is the world's biggest NAND flash memory maker with around 40 percent of the market. It competes with Japan's Toshiba Corp, Hynix Semiconductor Inc of Korea and Micron Technology Inc of the United States.

(Reporting by Miyoung Kim; Editing by Jonathan Hopfner)

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China, Japan, and South Korea established a Trilateral Cooperation Office in Seoul in 2011 after the earthquake, tsunami, and typhoons hit Japan and typhoons hit South Korea. The Office helps the three countries plan joint development projects and reconstruction efforts in the nations two of which are among China’s major trading partners. In addition, the chips are not as sophisticated as some that China has already produced for its indigenous supercomputer. Finally, making chips in the country of consumption cuts transportation costs in the face of rising oil prices, so both countries gain as the final products cost less to make.

Jan 04, 2012 11:31am EST  --  Report as abuse
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