Samsung Electronics began constructing a 10-nanometer-class NAND flash memory chip plant in Xian, in western China's Shaanxi Province, on Wednesday.

The electronics giant hopes to use the plant to boost its output of memory chips in China, which has grown into the world's largest market for the products. This is Samsung's second overseas chip-making facility following one in Austin, Texas, which was built in 1996.

Samsung plans to complete the first stage of its assembly lines, covering 380,000 sq. m, by the end of next year and start production in 2014. The first stage will cost US$7 billion to build, marking the largest single investment in China by a foreign company to date.

Construction of the next two stages will depend on how the local semiconductor market develops, Samsung said.

"Demand for NAND flash memory chips is concentrated in China, where 80 percent of PCs and 50 percent of smartphones that are sold around the world are produced," said Samsung Electronics Vice President Kwon Oh-hyun.

"By building the plant, we hope to get a head start in the Chinese market, which has emerged as the world's largest."