The plant, scheduled to come on line in 2014, will produce the advanced 10-nanometre-class NAND flash memory chips used for devices such as smartphones and computers, the firm said in a statement on ground-breaking day.
The world's largest memory chipmaker said earlier the plant, when completed, would produce 10,000 12-inch wafers each month.
"Reinforcing the company's support for its customers worldwide, the China facility will improve Samsung's global supply chain, making it easier for many of its customers to expand in the region," it said.
The world's largest technology firm that makes popular gadgets from smartphones to tablet PCs, Samsung also provides chip components to other IT firms including its industry rivals Apple and Nokia.
The firm said it had also started a programme to collaborate with researchers in Xian, home to 37 universities and 3,000 technology research centres.
Samsung leads the global NAND flash memory market with a 37.4 percent share in the first quarter of this year, followed by Japan's Toshiba and the US firm Micron, according to research firm IHS iSuppli.
For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.