Samsung has produced an 8Gb NAND flash memory chip, opening the way for a new generation of smaller, and larger capacity electronic goods.

As well as increasing the capacity, Samsung has reduced the size of the chip by 25 percent, it said. That will mean an increase in storage for small devices such as MP3 players, USB dongles and so on within the next six. Samsung made its intended market clear by pointing out that the 8Gb NAND flash device can store 2,000 MP3 files or 225 minutes of DVD-quality video.

The chip is manufactured by vertically stacking two 4Gb packages, each carrying a vertical stack of four 8Gb chips. The tricky issue for device makers now is that they will need to use four controller chips rather than two. Companies expect to leap that hurdle by the end of this year, meaning users should see 16GB USB flash drives in stores by Christmas.

Samsung is using 60-nanometer manufacturing technology to produce the chips. Shrinking the size is particularly important because the chips are used in so many small devices. Chip makers and other component makers have to reduce the size of the parts of a gadgets such as MP3 digital music players in order to miniaturize the entire gadget, or add more functions.