iPods, handsets, USB flash drives and other gadgets stand to gain from a new 8Gb NAND flash memory chip in mass production at Samsung's chip factories.

The world's largest memory chip maker not only shrank the chips by about 25 per cent from previous designs, it also increased the amount of songs, videos and other data that can be stored in small devices, it said today.

Users should see an increase in the amount of data storage capacity in small devices within the next six months thanks to the chip. Samsung said an 8GB NAND flash device can store 2,000 MP3 files or 225 minutes of DVD-quality video. It takes eight 8Gb chips to create one 8GB device.

NAND flash is manufactured by vertically stacking two 4GB packages, each carrying a vertical stack of four 8Gb chips. It's the kind of innovation the USB flash storage drive industry has been waiting for to push its devices to 16GB. The tricky issue for device makers now is that they will need to use four controller chips in such a drive, twice as many as in an 8GB model. 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-nanometre manufacturing technology to produce the chips. This measurement indicates the smallest size of the transistors and other features on chips. Making chip features smaller is important to reduce the size of chips, in addition to making them speedier and more energy efficient.

Shrinking the size of flash memory chips 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 iPods in order to miniaturise the entire gadget, or add more functions.