Samsung is investing $32 billion to keep lead in chips

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Samsung will make a huge investment towards the expansion and upgrade of its memory chip and smartphone business in South Korea. This spat has delayed adding an extra fabrication unit to a Japanese plant run by the two firms, keeping Toshiba from meeting frothing demand as worldwide competitors ramp up production.

Samsung has announced plans to invest at least $18.6 billion in semiconductors in South Korea.

Samsung is also planning to expand the NAND chip plant within Xian in order to meet the demand for chips utilized within high end storage products it claimed.

Mass production of the latest V-NAND chips at the new plant is part of Samsung's strategy to focus its capacities on the growing NAND chip market that is estimated to expand almost 40 percent every year. So, in 2016, the business for the production of chips provided 46.5% of operating profit of Samsung.

The investment underscores Samsung's determination to widen its lead in memory chips, which are expected to propel Asia's third most-valuable company to record profit this year. Pyeongtaek Semiconductor Line will be producing cutting-edge 4th generation 64-layer V-NAND. It routinely invests more than $10 billion in chips annually, helping it stay ahead of competitors such as cross-town rival SK Hynix and Japan's Toshiba Corp.

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"With the dedication and support of our employees, customers and partners, our Pyeongtaek campus represents a new chapter in Samsung's semiconductor operations", said Kwon Oh-Hyun, vice chairman and CEO of Samsung Electronics. The company invests more than $10bn in semiconductors every year.

The $18.6bn earmarked is a considerable increase from Samsung's already hefty yearly chip spend of $10bn and, on top of this, earlier this year Samsung announced it would build a $380m plant in the US.

To expand the giant's display division, Samsung Display is reviewing plans to establish a new organic light emitting diode (OLED) panel factory in Asan, South Chungcheong by 2018.

The latest move reportedly comes as a response to repeated calls to big corporations from the South Korean government to invest domestically as part of a job-creation plan.