Tsinghua to build $30 billion memory fab in China

China’s state-controlled chip vendor Tsinghua Unigroup announced plans to build a $30 billion memory chip in Nanjing, a city in eastern China. Tsinghua, which has acquired several chip vendors and facilities over the past few years, is also building a $24 billion memory fab in the Chinese city of Wuhan, announced last March.

Tsinghua said it plans to build DRAM and 3D NAND flash at the Nanjing fab. The first phase of the project will cost about $10 billion and result in the production capacity to produce 100,000 wafers per month, the company said. No timetable was provided for the project.

In 2015, Tsingua made an unsuccessful bid to acquire U.S. memory chip vendor Micron Technology Inc. for $23 billion.

China has been aggressively pursuing a goal of creating a strong domestic semiconductor industry to supply chips to its massive internal market. The Chinese government last year announced plans to invest $160 billion over 10 years to bolster its semiconductor industry.

The building of memory chip fabs has been widely anticipated as China’s next move. Last month, Rob Lineback, a senior market research analyst with IC Insights, told EE Times that it “makes sense that memory would be in the crosshairs of Chinese initiatives” because of the country’s appetite for memory to use in the production of Chinese-built products such as PCs, data center servers, tablets, and smartphones, plus a wide range of other applications.

China may have little choice but to build its semiconductor industry from the ground up after Western governments—particularly the U.S.—have grown increasingly wary of government-owned Chinese firms seeking to acquire Western companies. The Committee for Foreign Investment in the U.S. (CIFUS) has stepped in to thwart multiple acquisition bids, and last month President Obama took the rare step of blocking the acquisition of the U.S. assets of a German semiconductor equipment company by an investment firm with ties to the Chinese government.

Earlier this month, the White House made public a strongly worded report on the U.S. semiconductor industry and the threat posed to it by China. The report argues that the U.S. semiconductor industry needs to innovate and “run faster” in order to counter the threat posed by Chinese policies that distort the market in its favor.