South Korea's tech giant Samsung Electronics Co. said Monday it plans to invest some 15.6 trillion won (US$14.7 billion) to set up a new chipmaking facility in the northwestern part of the country to better meet the soaring global demands for chips.

Samsung said it will break the ground on the new plant in Pyeongtaek, some 70 kilometers south of Seoul, in the first half of next year, with the aim of starting its commercial production in 2017. 

"The semiconductor industrial zone set to be established in Pyeongtaek will take a crucial role in the future of Samsung's chip business," said Kwon Oh-hyun, chief executive of Samsung Electronics. "We wish to express gratitude to the government, Gyeonggi Province and Pyeongtaek for their support on the investment."

The company added the new facility will bring about a "significant" impact on its chipmaking competitiveness and in revitalizing the national economy.

With the tech giant already holding two more chipmaking facilities in Giheung and Hwaseong, also located in Gyeonggi Province, Samsung said the new production line will complete what it calls a state-of-the-art "semiconductor cluster" that will emerge as the hub for the global chip industry.

Samsung said it has obtained 2.83 million square meters of land in Pyeongtaek, adding the 15.6 trillion won will be used to build a production line on 790,000 sq. meters of the land. The electronics giant will come up with an additional investment plan in the future depending on market conditions. Upon completion, the Pyeongtaek plant will be Samsung's largest chipmaking facility, with the size of those at Giheung and Hwaseong standing at 1.32 million sq. meters and 1.58 million sq. meters, respectively.

In 2013, Samsung's combined investment in its chip business came to 12.6 trillion won. Samsung also has semiconductor plants in Texas, the United States, along with three more in China. (Yonhap)