Hynix Semiconductor and SanDisk have reached a patent cross-licence agreement and will jointly manufacture and sell NAND flash memory in addition to developing four-bit-per-cell flash memory.

Both companies will invest in increased manufacturing capacity at Hynix, the world's number two producer of DRAM (dynamic RAM) memory chips, based in South Korea.

The four-bit-per-cell flash technology, called x4, allows for more storage on a flash memory chip for the same manufacturing cost. Hynix had been collaborating with M-Systems Flash Disk Pioneers on x4 technology. SanDisk, however, bought M-Systems for $1.5bn in November 2006.

Neither company detailed what happened to the collaboration on x4 after SanDisk bought M-Systems. But the new agreement resolves intellectual-property issues between them and puts aside "distractions”, said O.C. Kwon, senior vice president of Hynix.

On Tuesday, Hynix reached an agreement with Toshiba to share semiconductor patents, ending patent-infringement suits in the US and Japan.