Samsung Electronics Co., the world's largest memory chipmaker, announced Monday it will build a semiconductor plant in central China as part of its move to diversify production.

The company said it will initially inject US$2.3 billion to build the plant in Xian, China. It added that up to $7.0 billion could be poured into the project in the coming years, making the plant Samsung's single largest overseas semiconductor investment endeavor. The move was approved by the company's board of directors earlier in the day.

Samsung said it selected Xian because it has good industrial and information technology infrastructures. Such an environment, it said, will allow the electronics giant to gain easy access to electricity and water, and makes it possible to work with related companies on research and development.

The urban setting can also help recruit talented employees, the company said.

Construction of the plant should start within the year with 10 nano-level NAND flash memory chips to be produced from late 2013 onwards, Samsung said.

(Yonhap News)