South Korea-based Samsung plans to invest $7 billion over the next three years to expand its memory chip production in the Chinese city of Xi’an in Shaanxi province.

In a regulatory filing Samsung said it approved $2.3 billion of the expected total investment, Reuters reported.

Samsung in July announced plans to invest at least KRW37 trillion ($33 billion) in its memory chip production facilities in South Korea by 2021 and said at the time it was reviewing plans to set up a second semiconductor production line in Xi’an, where it built its first line in 2014.

China is keen to develop the country’s memory chip production, with its handset vendors dependent on imported components, but analysts predict it will take three to five years for them to pose a serious threat to the top players.

Under the domestic investment plan, the company will invest KRW30 trillion by 2021 in its Pyeongtaek line to expand its semiconductor fabrication capacity, and KRW6 trillion in its Hwaseong site for a chip fabrication line optimised to install state-of-the-art infrastructure, including extreme ultraviolet equipment. The remaining KRW1 trillion is earmarked for the establishiment of a new OLED manufacturing site in Asan.

Samsung accounted for about 40 per cent of global memory chip revenue in Q1, according to TrendForce.

The company reported a record profit in Q2 of KRW11.05 trillion, up from KRW5.85 trillion in the prior year, with its memory business achieving “solid earnings growth” as the market continued to see supply constraints, which “allowed for favourable supply-demand conditions and prices”.

It forecasts continued growth in the global memory sector in Q3.