Samsung Elec. launches chip plant in western China

Chinese Vice Premier Li Keqiang has sent a letter of congratulations to Samsung Electronics for the company`s decision to promote massive investment in Shaanxi as part of the development of western China.

"The project is an important accomplishment between China and Korea in that it was based on a close alliance in the information technology industry leveraging the two countries` strengths," Li said.

Chinese authorities welcomed the opening of a plant by displaying red lights and placards and the Samsung logo along 20 kilometers from Xian to the Samsung facility. Chinese media including CCTV also reported on the groundbreaking ceremony of the Samsung factory.

Korean ambassador to China Lee Kyu-hyung said, "Samsung`s investment has a significant meaning in that Korean investment in China is expanding from the manufacturing-focused processing trade to high-tech sectors in the central west."

The Xian plant is Samsung`s second for semiconductors overseas following that in Austin, Texas.

Samsung expects to better cope with the fast-changing global IT market by building a production base in China and the U.S., which are major footholds for global IT companies. The demand for next-generation 10 nano-level NAND flash memory chips is likely to surge as they are used in various smart devices including smartphones and tablet PCs.

Starting with Samsung`s Xian plant investment, more than 160 Korean and foreign suppliers are also expected to advance into the region. A Samsung source said, "We will support our suppliers to help them grow into small but powerful companies."

Samsung also expects to hire 2,000 staff when the plant runs at full capacity. Including workers at its suppliers, the number of jobs created is expected to reach 13,000.

Among the 800 people attending the groundbreaking ceremony were Zhao Leiji, secretary of the Shaanxi provincial committee of the Communist Party of China; Ambassador Lee; Korean Deputy Knowledge Economy Minister Yoon Sang-jik; Samsung Electronics Vice Chairman Kwon Oh-hyun; Samsung China President Jang Won-ki; Samsung Electronics President Jun Dong-soo; and Samsung Semiconductor China CEO Kim Heung-sik.

mungchii@donga.com