Japan's Toshiba is teaming up with US chip giant SanDisk to produce a "3-D" memory chip they hope will be able to store up to 50 hours of ultra-high-definition video.
In a deal worth a reported US$4.8 billion, the companies will build a factory to make flash memory chips consisting of several layers of semiconductors stacked together to give as much as a terabyte - 1,000 gigabytes - of storage.
That is about 16 times bigger than the largest 64-gigabyte Toshiba memory chip now available in smartphones and tablet devices.
Toshiba will demolish its plant in Japan to build a new one to house production apparatus using technologies from both firms and which the firms hope will start operating in 2016.
The plan comes at a time of increasing competition among the world's technology firms to meet consumers' demand for ever-higher capacity memory chips.
The spread of high-definition video, with so-called 4K screens at the leading edge, is boosting demand for computing memory to store content.
"Small, high-capacity memories can of course be applied to smartphones, but they could also be used for wearable devices," the Toshiba spokeswoman said.
Manufacturers have traditionally competed with regular chips by trying to make the physical object smaller.
Toshiba, along with major rivals such as Samsung, believe they are reaching the physical limit, and are shifting towards 3-D memories, where layering is used to boost the capacity of objects the same size.
Yasuo Naruke, Toshiba senior vice-president, said: "Our determination to develop advanced technologies underlines our commitment to respond to continued demand for flash memory."
SanDisk president and chief executive Sanjay Mehrotra said the plant "will advance our leadership in memory technology into the 3-D... era".