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Kingston Technology and Phison Electronics will be spinning off their respective embedded business units and combine them into a joint venture.

We got wind of the rumour at Digitimes which said the pair will supply eMMC, MCP and other mobile memory products for use in smartphones and tablet PCs in a bid to compete with Samsung.

The official line from Kingston is that it won't comment. Europe's not aware of what's going on in the East so we are not able to confirm or deny - but we wouldn't be surprised. It seems like a reasonable move.

Kingston already has resources in NAND flash and mobile RAM, however in Taiwan it may not want to develop embedded memory business itself to avoid market competition with its suppliers Toshiba and Hynix.

Phison has controller IC technology to develop embedded memory products, but lacks its own brand to compete for orders. This is the main reason for the planned joint venture, sources said.

While NAND flash vendors Samsung, Toshiba, SanDisk, Micron and Hynix supply embedded memory products, Samsung is dominating the global market.