Samsung to invest $1.7 billion in Kunshan plant: Xinhua

The company logo is displayed at the Samsung news conference at the Consumer Electronics Show (CES) in Las Vegas January 7, 2013.

BEIJING (Reuters) - South Korean electronics giant Samsung plans to invest $1.7 billion in expanding and fitting out its operations in Kunshan, a fast-growing manufacturing hub west of Shanghai, the Xinhua news agency said on Sunday.

Samsung's expansion comes as the world's largest maker of handsets, memory chips and televisions attempts to diversify its clients and exert greater control over its sprawling manufacturing network, which includes 250 supplier factories in China.

The company is already building a $7 billion chip complex in Xi'an, an industrial city in northwestern China.

The Kunshan investment will be used to build workshops, purchase equipment and set up research institutes operated by Samsung Electro-Mechanics Co., to support a chip carrier related project, Xinhua said, citing sources with the Kunshan municipal government.

Manufacturing in China is rapidly expanding, with electronics assembly lines displacing low-margin producers of textiles and toys.

Samsung's growing presence in China has earned it the attention of labor activists more accustomed to scrutinizing rival electronics manufacturing giant Foxconn.

Foxconn, the trading name of Taiwan's Hon Hai Precision Industry, conducted an internal audit and pledged to address issues at its supplier factories, after a report in 2012 found it had hired underage workers.

The Kunshan plant was originally set up in 2008.

(Reporting By Lucy Hornby; Editing by Alison Birrane)