Samsung expected to locate new memory chip plant in Beijing

HONG KONG -- Samsung Electronics Co.'s (KSE:005930) proposed new plant for the production of memory chips is expected to be located in Beijing, largely because it is one of China's most economically developed cities, a source said Monday.

Earlier this month, the South Korean government approved the electronics giant's plans to build a manufacturing plant in China to produce high-tech NAND flash memory chips. The location of the factory was not announced at the time.

According to an industry insider, Samsung Electronics has decided to invest US$4 billion in Beijing to set up the new factory after a comprehensive review of several candidate sites.

The municipal government of Beijing may have pledged various support and resources in order to attract the large-scale corporate investment.

The building of the new factory, which is still pending final approval from the Chinese government, will be Samsung's second chip factory overseas. The first one was built in Texas.

Once constructed, the plant can churn out 100,000 12-inch wafers per month. The NAND flash memory chips are used in small electronic devices, including MP3 players and cellular phones.

Samsung, meanwhile, has agreed to maintain the level of parts made inside South Korea that are used in final products. It also stressed that efforts will be made to expand its investment and production capability inside South Korea.