Samsung building $500m packaging and testing facility in China

Samsung will plunge some $500 million [£313 million] into constructing a new facility in Northwest China to further support its flourishing device business in the country.

The new plant, which will be responsible for packaging and testing new products, will be built in the city of Xi’an, according to China Daily. Xi’an is the same place the firm built a $7 billion [£4.3 billion] chip complex just last year.

The South Korean technology company also invested $1.7 billion [£1.06 billion] in its manufacturing hub in Kunshan, a city just west of Shanghai, in January 2013.

Reuters report the move is being made to give the firm more control over its Chinese manufacturing network, which is currently spread across 250 supplier factories as well as its own locations.

Samsung will start building the new plant in January 2014 and the plan is for it to be ready to open by the end of next year.

China is one of Samsung’s most important markets for smartphones where it is the largest supplier by some margin with 17.6 per cent of the market in Q2 2013 as it shipped some 15.5 million smartphones to Chinese consumers. This is a mere drop in the ocean when set against the 88.1 million smartphones sold in that period – 20 per cent of the total number sold on a worldwide basis.

Apple has a mere 4.8 per cent of the market and is trying to arrest the decline by releasing the cut-price iPhone 5C to Chinese consumers – a device that has already been branded too expensive by some.

Samsung, meanwhile, also beat Apple to the punch by releasing a smartwatch called the Galaxy Gear that can be used alongside the new Galaxy Note 3 smartphone with Samsung Galaxy S4 connectivity coming in October.

Image Credit: Flickr (samsungtomorrow)