Wed August 6, 2003 02:59 AM ET
TOKYO (Reuters) - South Korea's Samsung Electronics Co Ltd will start making and selling Sony Corp memory products used in digital cameras and electronic organizers, the companies said on Wednesday.
Under the agreement, Samsung will begin in the July-September quarter in-house manufacturing of Sony's Memory Stick, the two companies said in a joint news release.
Digital cameras, personal digital assistants and personal computers often come with a slot for removable memory, which has an easily rewritable NAND-type flash memory, allowing users to store data and transfer information to other digital products.
Industry figures, quoted by a Samsung official, put the flash memory market at $10 billion, with the Memory Stick accounting for a quarter of the total market.
The South Korean manufacturer will also be able to sell Memory Stick products under the Samsung brand, competing with other manufacturers of the memory media, including Lexar Media Inc, Sandisk Corp and Sony itself.
"Samsung Electronics is a major semiconductor manufacturer and its manufacture and sale of Memory Stick media will accelerate the growth of Memory Stick throughout the world," said Sony President Kunitake Ando in a news release.
Sony views the Memory Stick as the heart of an interconnected digital electronics network, allowing users to transfer photos taken from a digital camera or mobile phone to a PC, or download music from the PC to a network Walkman.
By building a larger base of Memory-Stick suppliers and products, Sony aims to lure future customers to its compatible electronics. The Japanese electronics giant procures the NAND-flash chips for its Memory Sticks from outside suppliers.
Toshiba Corp, San Disk and Matsu****a Electric Industrial Co Ltd, maker of the Panasonic brand, have developed a rival form of removable memory called the SD Card.
Samsung will also bundle the Memory Stick with its compatible products, such as DVD players and televisions. The two electronics giants reached a basic agreement in August 2001 to add Memory Stick compatibility to some Samsung products.
The deal offers Samsung, the world's largest maker of NAND-type flash memory, a chance to expand its reach in a rapidly growing market. Sony said total shipments of Memory Stick compatible products topped 40 million units as of April 2003.
Demand for removable memory is expected to grow, thanks to booming demand for digital cameras. Sony said in July it plans to ship 10 million digital cameras this year, up from an April shipment target of eight million units.

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