Samsung Electronics, the world's No.1 memory chip maker, said on Thursday it had started operations at a new memory chip line, a move that may further exacerbate semiconductor oversupply and hit smaller rivals.
Its new memory semiconductor fabrication facility, Line-16, at its Nano City Complex in Hwaseong, Gyeonggi Province, has commenced operations.
The company claimed it is the industry's largest memory fabrication facility, which occupies 198,000 square meters of land.
Samsung began construction of Line-16 in May 2010, and completed installation of equipment for cleanrooms a year later. The new facility started trial production in June 2011, according to the company.
The South Korean firm said the new line was the industry's largest and most advanced memory fabrication facility, producing chips with 20-nanometre class processing technology, which improves manufacturing costs by some 50 percent.
Lower line-widths processing technology allows more circuits on a chip, making them smaller, cheaper, more powerful and more energy efficient.
While celebrating the opening of the new facility, Samsung also remarked that mass production of its 20nm-class made 2Gb DDR3 memory has kicked off.
The new line comes as computer memory prices have fallen more than 30 percent over the past three months to below production costs due to faltering demand from computer makers.
Samsung said it plans to build 4Gb chips using the newer 20nm-class process by the end of 2011, and will broaden its memory product lineup with mass production of 4GB, 8GB, 16GB and 32GB DDR3 modules in 2012.
Samsung had a market share of 41.6 percent in the global DRAM market in the second quarter, according to research firm IHS iSuppli.
Its share of the world market for NAND flash chips was also 41.6 percent in the second quarter, ahead of Toshiba's 28.7 percent.
In addition, Samsung revealed that starting September, it started to produce 20nm-class NAND flash memory chips with a projected volume of more than 10,000 12-inch wafers monthly. The company will also begin production of chips using 10nm-class process technology in 2012.
Samsung previously said that Line-16 would be capable of processing 200,000 12-inch wafers a month. The facility will house production lines for DRAM, NAND and next-generation memory products.
The company said it would raise production of NAND flash chips to meet growing demand, and would begin production of more advanced flash chips using 10-nanometer process technology next year.
Global shipments of computers are projected to grow only a low-to-mid single digit percent this year as consumers switch to more popular tablets and smartphones.