According to one embodiment, a method includes forming a first insulative layer above a bottom surface of a groove and along inner sidewalls thereof, forming a source line layer within the groove of the substrate, forming a first dielectric layer on outer sides of a middle portion of the source line layer, forming a buffer layer on outer sides of the first dielectric layer, forming a gate terminal above the source line layer, forming a gate dielectric layer between the source line layer and the gate terminal and on outer sides of the lower portion of the gate terminal, forming a drain terminal including strained Si on outer sides of the first dielectric layer, and forming a relaxed buffer layer on outer sides of the upper portion of the source line layer and outer sides of the drain terminal, with the gate terminal extending beyond the relaxed buffer layer thickness.