Samsung invests more in Xi'an

Students use Samsung computers at a school in Xi'an, Shanxi province. Yuan Jingzhi / China Daily

Samsung Electronics Co Ltd will invest $500 million in Xi'an, Shaanxi province, to set up a packaging and testing facility.

The move comes one year after the South Korean company invested $7 billion to build a memory-chip plant in the Xi'an Hi-tech Industry Development Zone.

On Thursday, the company signed an agreement with the Xi'an hi-tech development zone, one of the largest industrial zones in central and western China, for the $500 million project.

With Samsung's new investment, local officials said that Xi'an now has a good chance of becoming a cluster for the semiconductor industry in the next few years with an annual output value of more than 100 billion yuan ($16.25 billion).

Kwon Oh-hyun, Samsung Electronics' chief executive officer and vice-chairman, said the new project will help the company build a complete industrial chain in Xi'an, covering areas ranging from the production of memory chips to hard disk manufacturing.

The project, which will comprise assembly lines for the packaging and testing of flash memory chips and solid-state disks, is a supporting project to Samsung's chip facility.

Kim Chang-yeong, director of Samsung Electronics' R&D center, said the investment will help provide support to areas such as the production of mobile phones and tablet PCs.

The total floor area of the new facility will be 70,000 square meters. Construction is expected to start in January 2014, and the factory will be completed by the end of next year, according to An Jianli, director of the administration committee of the Xi'an Hi-tech Industry Development Zone.

The project is also expected to attract about 20 more companies engaging in supporting businesses to the development zone, An said.

Meanwhile, also on Thursday, Samsung Electronics' new R&D and data centers were put into operation in the development zone.

The two facilities will mainly conduct R&D activities for high-level software, which will further upgrade the level of local software research and development, as well as outsourcing businesses, Kim said.

Samsung Electronics' R&D center will develop products, including mobile phones, smart televisions and semiconductors, and it will research cloud computing and medical projects.

The data center was developed by Samsung Data System and will be the second-largest global data development center after the company's existing data center in Beijing.

The Xi'an data center will mainly engage in SDS' global outsourcing business and provide IT solutions for the company's projects in Xi'an.

According to Zhao Hongzhuan, Party chief of the Xi'an hi-tech development zone, Samsung's chip project is expected to attract more than 100 supporting companies with an output value of more than 60 billion yuan, and it will create more than 13,000 new jobs.

Other semiconductor companies operating in Xi'an's development zone include Micron Technology Inc, Applied Materials Inc, Huajing Electronics Co Ltd and Huaxun Micro Electronics Co Ltd, said An, the official with the development zone.

He added that the construction of the main plant for Samsung's memory-chip project has already been completed and further work is in progress.

The factory is expected to become fully operational by the end of the year. It will have a monthly output of 100,000 chips with annual sales worth 66 billion yuan, An said.