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Samsung to pour $9bn into Chinese flash memory plant

Aims to extend lead over Toshiba amid chip sale turmoil

A Samsung Electronics memory fab in South Korea. The company is stepping up investment in flash memory in response to brisk demand.

SEOUL -- Samsung Electronics will spend around 10 trillion won ($8.91 billion) to double capacity at a cutting-edge memory chip plant in China by 2019, aiming to solidify its position at the top as the sale of rival Toshiba's memory operations drags on.

The South Korean giant will add a second production line for NAND flash memory at fabrication facilities in Xi'an, Shaanxi Province, enabling the plant to process 220,000 silicon wafers a month. Construction is set to begin this year.

The Xi'an fab uses 3-D NAND technology, in which individual memory cells are stacked on top of each other to improve durability and reduce power consumption. With too few chips being produced to meet demand, Samsung sees a capacity expansion as a good investment.

Demand is robust for flash memory used in smartphones and data centers. The bulk sales price of benchmark flash memory chips has soared more than 50% on the year to nearly $3 per unit. This strength and expectations of medium-term growth have spurred companies to go after Toshiba's memory business.

With Toshiba reeling, some South Korean analysts say now is a good time for Samsung to go on the offensive. The company previously took the same tack with DRAM memory chips and liquid crystal display panels, making big investments when the Japanese competition fell behind.

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