Samsung Elec considers adding capacity at China chip plant

SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd said on Monday it is considering adding memory chip production capacity at its manufacturing base in China amid an industry-wide boom that will likely fuel record sales for memory suppliers.

The firm was considering adding capacity at its facility in Xi'an but no specifics, including the potential investment amount and what products it would make with the additional resources, had been decided, a Samsung spokesman said.

Samsung, the world's No.1 memory chip maker, has already invested $7 billion in the Xi'an facility to make 3D NAND memory chips. The chips are used for high-end data storage products on electronic devices such as smartphones, personal computers and data servers.

South Korean media reports said earlier on Monday that Samsung was in advanced talks with the Chinese authorities to add 3D NAND chip capacity in Xi'an, and that construction could begin before the year-end.

The South Korean firm and other memory chip companies are expected to enjoy record revenue and profits in 2017, driven by growing demand for more processing firepower in consumer electronics, and diminishing production yield on investment as technology grows more sophisticated. Researcher IHS expects this year's memory industry revenue jump 32 percent to a record $104 billion.

Industry executives and analysts say 3D NAND suppliers will likely struggle to keep up with orders from clients throughout 2017.

Samsung and its rivals have been boosting 3D NAND investment accordingly. While Samsung has so far not given specific targets, it said in April that capital expenditures would rise significantly this year in part due to its plans to boost 3D NAND production capacity.

(Reporting by Se Young Lee; Editing by Stephen Coates)