Chipmakers Plan Heavy Investments in China
Chipmakers plan to greatly expand capacity in China, with total investment expected to reach $50 billion in the next five years, according to a Nikkei survey. There are at least 10 plans for fresh construction or expansion, including a $24 billion memory plant planned by China's Tsinghua Unigroup. In addition, Intel and Samsung Electronics plan to expand existing plants amid Beijing's push to grow the chipmaking sector into a key industry.
To that end, Beijing has encouraged foreign companies to invest in China.
The Nikkei surveyed chipmaking-equipment manufacturers and chipmakers around the world about their operational status, including order trends and plans, and tallied their expected capital expenditures in China.
Tsinghua Unigroup's planned plant in Wuhan, Hubei Province, will produce NAND flash memory, with production capacity to be raised in phases. The company also plans to make DRAM at the plant.
Intel plans to expand capacity at its memory plant in Dalian, Liaoning Province. Samsung Electronics may also make an additional investment in China.
Other companies planning to build new Chinese plants include Taiwan Semiconductor Mfg. (TSMC) and GlobalFoundries of the U.S.
Chipmakers want manufacturing bases in China in order to be closer to local factories that assemble smartphones, personal computers and other devices. They are also seeking to establish closer communications with Beijing, which could help them develop sales channels in the world's most populous country.