Samsung Electronics Co Ltd has begun work on a sixth domestic contract chip production line, the company said on Thursday, to make logic chips for mobile phones and computers as it looks to cut reliance on the volatile memory chip sector. The South Korean firm is taking on bigger rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) in the contract manufacturing business, where it competes for orders from customers such as Qualcomm Inc. “This new production facility will expand Samsung’s manufacturing capabilities,” the company said in a statement on Thursday. Samsung is targeting the second half of next year to start producing advanced 5 nanometre chips, using extreme ultraviolet (EUV) technology, on the added line in its plant in Pyeongtaek city, within a two-hour drive of the capital, Seoul. “This is Samsung’s effort to narrow the gap with TSMC, as it still lags behind TSMC in the contract chip making market,” said Park Sung-soon, an analyst at Cape Investment & Securities.