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Fourth generation V-NAND flash drives. (provided by Samsung Electronics)

Samsung Electronics revealed in an official announcement on August 28 that the company plans to invest $7 billion over the next three years to expand Samsung Semiconductor’s NAND flash memory factory in Xian, China. The decision was made to “respond to growing demand for NAND flash drives over the mid-to-long-term,” according to the company.

On July 4, Samsung Electronics began operating its semiconductor plant in Pyeongtaek, Gyeonggi Province, while also announcing that the company was considering expanding its production facilities in Xian. The first Xian production line was completed in 2014 and is currently operating at full capacity.

Samsung’s expansion of the factory is a strategic move that will allow for greater economies of scale and production to meet the needs of the Chinese market, which has the highest demand for NAND flash drives in the world. Despite concerns that the large-scale investment decision would be postponed as Samsung Vice Chairman Lee Jae-yong was sentenced to prison, the company has decided to push ahead with the plan as a way to respond to growing demand.

In an executive meeting of Samsung Electronics’ management committee which was held the same day, a loan of $2.3 billion to Samsung Semiconductor was approved. The new facility is expected to serve as a dedicated production hub for V-NAND flash drives.

By Lee-wan, staff reporter

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