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Samsung to Invest $7 Billion in China Flash-Memory Production

The investment will occur over a three-year period and be focused on its plant in China.

Samsung Electronics Co., the world’s biggest maker of memory chips, will invest $7 billion in a Chinese semiconductor plant to meet growing demand for the NAND flash memory used in smartphones and other devices.

The spending will take place over a three-year period and be focused on its plant in Xi’an, the Suwon, South Korea-based company said on August 28.

Samsung’s strength in memory chips has driven the company’s earnings to a record in the most recent quarter, and helped it become more profitable than Apple Inc. The announcement came just days after a Seoul court sentenced Vice Chairman Jay Y. Lee to five years in prison for his role in a graft scandal.

NAND is used in everything from smartphones to connected appliances, as well as memory cards and flash drives. Samsung had about 41% of the NAND market in the March quarter, more than double the 18% of Toshiba Corp., which developed the technology, according to data compiled by Bloomberg from IDC.

The South Korean company is also the biggest producer of dynamic random access memory, or DRAM, with about 44% of sales.

By Robert Fenner

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