Asian chipmakers are entering a fierce investment battle to produce more of the key component of personal computers and digital home electronics, but experts warn of an oversupply in a year or two because the current year is seen as a peak in the silicon cycle -- the rise and fall of supply and demand in semiconductors.

Samsung, the world's largest DRAM producer, earlier this month revised upward its capital investment plan by more than 1 trillion won, or about 100 billion yen, to 8.94 trillion won. More than half of that figure is expected to be used for memory, centering on DRAMs, and planned investments in that area were boosted to 4.97 trillion won from 3.9 trillion won.

The company plans to create its 12th and 13th production lines that use 300mm wafers at its plant in Kiheung. It is expected to continue aggressive investments in 2005 and beyond.

Samsung's large-scale investments are backed by its confidence in its future. The electronics giant has traditionally continued making aggressive investments when the semiconductor market was cooling off, and thus succeeded in expanding its market share as well as in gaining a dominant position in the race to develop cutting-edge products. It has remained the world's leader in the DRAM market for over the last 10 years.

Korea's Hynix Semiconductor Inc, the world's fourth-largest DRAM supplier, has also started moves to boost output due to its posting of record sales and profit in the April-June quarter.

The company on July 20 began construction of a mass production line for memory chips at its Ichon plant, and is negotiating with a foreign firm to establish a joint plant in China.