Tokyo Electron is taking aim at Lam Research in the semiconductor market with its latest game-changing innovation that could pose a huge threat to the latter's market share.

The new technology is for 3D NAND flash memory, which can store data for long periods of time, and although Lam Research has been dominating the NAND Flash memory channel, the new innovation will potentially throw a blow to the U.S.-based industry, according to Nikkei Asia.

3D NAND is also known as vertical NAND. It’s a type of non-volatile flash memory in which the flash memory cells in a transistor die are stacked vertically to increase storage density. Tokyo Electron developed a new method of etching channel holes, a step in the production process which involves inserting vertical holes quickly and deeply in the memory cells.

It is made up of a grid of memory cells, each of which can store one bit of data. NAND flash memory is a popular choice for devices that need to store large amounts of data, such as smartphones, tablets, and laptops. NAND flash is also used in solid-state drives (SSDs), which are faster and more reliable than traditional hard drives.

The Japanese semiconductor maker has projected that the NAND channel process market will expand from $500 million in 2023 to $2 billion in 2027, according to the report. If Lam is unable to produce a product that can compete with Tokyo Electron's breakthrough, the companies' current market shares could be reversed.

Both companies have enjoyed significant revenue with Lam Research always hitting higher with its annual revenue for 2023 hitting $17.43 billion, and a 1.17% increase from 2022. Tokyo Electron's annual revenue for 2023 was $16.543 billion, a 1.04% increase from 2022, according to Macrotrends.