Samsung to start building new memory chip line in China soon

Updated 2018-03-16 11:11:10

Samsung Electronics Co plans to begin building a new memory chip production line in China in late March, a spokesman said on Thursday, to boost NAND flash technology to meet future demand.

The South Korean company said in August 2017 that it expected to invest billion over the next three years to expand its NAND memory chip production in Xi'an, Northwest China's Shaanxi Province, but it had not specified a timetable.

The rapidly growing data center market, which needs more memory capacity to handle increasing data traffic, is expected to underpin revenue growth and margins for Samsung's NAND Flash business in 2018, research provider Trendforce said.

Samsung's revenue from NAND in the fourth quarter of 2017 rose 9.8 percent quarter-on-quarter to .17 billion, Trendforce said, as demand from smartphone and server markets lifted shipments and prices.

Samsung will formally begin the process near month-end at Xi'an, earmarked for NAND flash production, the spokesman said, without giving other details.

Samsung Electronics shares have risen about 13 percent from early March on an improved outlook for the memory chip market, putting to rest concerns that the recent boom might end.

"Memory chips are solid. For DRAM chips, server demand is very strong," said Kwon Sung-ryul, an analyst at DB Investment & Securities. "NAND flash chip shipments and prices are moving within expectations, but there's a chance that supply will become tighter again in the second half of 2018 due to rising demand," Kwon said.

The expansion is not expected to affect memory chip supply until 2019 at the earliest, analysts said.

The booming market for semiconductor memory products is mainly led by NAND flash and DRAM chips, which are widely used in smartphones.

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