Huge gains promised as joint venture commits billions of investment dollars.
Japanese company Toshiba has teamed up with SanDisk to manufacture 3D NAND memory chips that can store 50 hours of ultra-high-definition video in a single chip.
As part of the agreement, both the companies will convert a jointly operated 2D NAND facility at Yokkaichi in Mie prefecture of Japan to manufacture the high capacity memory chips from 2016.
Although neither company has disclosed the size of investment, according to Nikkei business daily, they will be investing about $4.9bn in the facility.
Yokkaichi plant will manufacture high capacity memory chips using 3D technology to boost density through layering process, which can store up to 1,000GB of data.
Toshiba Semiconductor & Storage Products president and CEO Yasuo Naruke said the plan to develop advanced technologies is to respond to continued demand of NAND flash memory.
"We are confident that our joint venture with SanDisk will allow us to produce cost competitive next generation memories at Yokkaichi," Naruke said.
In the past couple of years chipmakers have been trying to shrink the size of memory chips to meet increasing demand for high capacity chips that could be used in smartphones and other mobile devices.
Toshiba, along with Samsung, is currently leading NAND memory chip suppliers and plans to further ramp up investment in memory chips.
SanDisk president and CEO Sanjay Mehrotra said: "We are pleased to continue our long-standing collaboration with Toshiba in this new wafer fab, which will advance our leadership in memory technology into the 3D NAND era."
Toshiba has already developed a 15-nanometer (nm) process technology, which will apply to 2-bit-per-cell 128-gigabit (16 gigabytes) NAND flash memories, replacing its second generation 19 nm process technology.
In August Samsung commenced production of first three-dimensional (3D) Vertical NAND (V-NAND) flash memory, which can store 128GB data, utilising its vertical cell structure based on 3D Charge Trap Flash (CTF) technology and vertical interconnect process technology to link the 3D cell array.
V-NAND technology is a vertical interconnect process technology, which can stack as many as 24 cell layers vertically, using etching technology that connects the layers electronically by punching holes from the highest layer to the bottom.