South Korean chipmaker Hynix plans to invest up to $800m (£440m) in its first ever plant in China, an official has told the Reuters news agency.
China's semiconductor market is estimated to be worth $30bn
The company is in contact with the government of Wuxi in the east of the country, the investment official said.
Hynix is seeking new markets after the US and European Union put tariffs on its chips last year, accusing the company of receiving state subsidies.
China's semiconductor market is estimated to be worth $30bn.
Analysts say chips made in China could be exported to the US and Europe without being subject to the new tariffs.
Hynix, which has recorded substantial losses recently, is in the process of shedding assets and shifting its production to more profitable areas, such as flash memory chips used in digital cameras and mobile telephones.