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Samsung to invest $7bn in China memory chip factory | Samsung to invest $7bn in China memory chip factory |
(40 minutes later) | |
Samsung Electronics, the world's biggest memory-chip maker, has unveiled plans to invest $7bn (£4.4bn) towards building a chip factory in China. | Samsung Electronics, the world's biggest memory-chip maker, has unveiled plans to invest $7bn (£4.4bn) towards building a chip factory in China. |
Samsung will initially invest $2.3bn in the plant, which will make chips for smartphones, tablets and MP3 players, and increase its investment gradually. | Samsung will initially invest $2.3bn in the plant, which will make chips for smartphones, tablets and MP3 players, and increase its investment gradually. |
The firm has been looking to tap into the lucrative Chinese market, but there have been fears of technology leaks. | The firm has been looking to tap into the lucrative Chinese market, but there have been fears of technology leaks. |
Samsung won a government approval to build the plant earlier this year. | Samsung won a government approval to build the plant earlier this year. |
In an emailed statement to the BBC, Samsung said the new facility will help it "rapidly respond to meet the fast-growing demand from customers and further strengthen competitiveness in the memory industry". | In an emailed statement to the BBC, Samsung said the new facility will help it "rapidly respond to meet the fast-growing demand from customers and further strengthen competitiveness in the memory industry". |
The plant is expected to start production by the end of 2013. | The plant is expected to start production by the end of 2013. |
'Perfect sense' | |
Over the years, China has become a leading manufacturing hub for consumer electronics. | |
Contract manufacturers such as Foxconn, have been making gadgets ranging from smartphones to tablets PC for leading global brands. | |
Many of these products use memory chips manufactured by Samsung. Analysts said having a production facility in China will help Samsung to further strengthen its position with its customers. | |
"Inventory cycles are very short for electronics manufacturers," Tim Charlton of Charlton Media Group told the BBC. "You need to be close to your customers for inventory and delivery reasons." | |
He explained that being in China will help Samsung take out extra layers of transport and storage and ensure speedier deliveries to its clients. | |
"It makes perfect sense for them." |