Tsinghua Unigroup Ltd, China’s top state chip manufacturer, revealed plans on Thursday to build a US$30 billion memory chip factory as the government seeks to boost local production capacity.

The firm is targeting a monthly capacity of 100,000 wafers in phase one of the development which will cost US$10 billion and is located in Nanjing.

In a statement on its website, Tsinghua Unigroup said the project is part of China’s efforts to build a world-leading chip industry, and it hopes it will create a siphoning effect to attract more development.

Tsinghua Unigroup announced plans for a separate US$24 billion chip factory based in the Chinese city of Wuhan in March last year.

The development comes as Chinese memory chip firms face increasing regulatory resistance to acquiring overseas technology.

In December US President Barack Obama issued an executive order barring the acquisition of the US business of German semiconductor equipment maker Aixtron by a Chinese-backed chip fund over security concerns.

Last year, Chinese chip makers withdrew a record volume of overseas deals.

In 2015, Tsinghua Unigroup tried unsuccessfully to acquire US chip group Micron Technology.

Tsinghua’s new plant will produce DRAM and 3D-NAND flash chips which are used in a range of devices including smartphones and personal computers.

The firm also announced it would invest roughly another 30 billion yuan (US$4.37 billion) in building an “international city” facility including apartments and international schools for foreign employees.

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