Samsung to produce memory chips for PSP

TOKYO--Samsung Electronics said today that it will provide memory components to Sony Computer Entertainment for use in its PSP handheld gaming unit. Samsung will supply a chip package that has a capacity of 64 megabytes of data, consisting of a 256-megabit NAND flash memory and high-speed mobile DDR DRAM, according to a Reuters dispatch. Representatives at Sony have acknowledged that the deal is already in place but would not comment further on the memory components provided by Samsung.

The deal is a win-win for both companies. It will help Sony reach its goal of shipping 3 million PSPs worldwide by the end of March, which is especially beneficial for the company since it's had trouble securing enough components for the handheld's production. For Samsung, the deal is expected to help expand its share of the memory chip market, as well as expand its presence in the consumer electronics market.

Following the announcement, shares in Samsung (on the Nikkei Stock Exchange) rose 0.3 percent to 441,000 yen ($423.2), while shares in Sony increased 0.99 percent to 4,070 yen ($39.67).

Sony released the PSP in Japan on December 12, 2004, and shipped 510,000 units by the end of the year. The company expects to release the handheld in America and Europe sometime this March. Whether Sony can ship more than its target 3 million units depends on the volume of components the company can outsource...as well as manufacture in-house. Sony is currently struggling to increase the overall production rate at its high-tech, 90-nanometer chip plant in Japan, which manufactures the GPU (Graphics Processing Unit) for the PSP.