A new dynamic RAM cell called Folded Capacitor Cell (F.C.C.) have been developed for use in future megabit DRAMs. With keeping the storage capacitance large enough against soft errors, the cell size is reduced by utilizing the vertical capacitor made along the isolation region. Three dimensional device simulation has been extensively carried out to characterize the interaction of neighbouring cells. The application of FCC to realize 4M bit or 16M bit DRAMs is also discussed.