Intel is coming out with a new chip package that will let cell phone makers put far more memory into handsets, a key ingredient for transforming phones into miniature computers.

The StrataFlash Wireless Memory System essentially lets phone makers insert four memory chips into the same confined space where only one or two chips now fit, said Curt Nichols, vice president and general manager of the flash products group at Intel. With the new package, phones will be able to accommodate as much as 1 gigabit of memory.

Cell phones are big memory hogs. The amount of memory inserted into cell phones used to double every two years. Now it doubles every 15 months as consumers are beginning to use handsets to store calendar information, access the Web and perform other functions usually handled by desktops, Nichols said.

"In Korea today, you can download live television broadcasts and MTV-type videos," he said. Japanese and Korean consumers have also begun to use their phones to host and record videoconference calls.

One of the key features of the new packaging system is that it allows cell phone makers to confine different types of data to different chips. One chip can be reserved for storing the operating system and phone applications, for instance, while another can serve as a repository of its owner's data. Now, this data all might exist on the same chip.

In all, up to 1 gigabit of memory (four 256-megabit chips) can fit into the four-layer package. Right now, Intel's best packages can hold only two chips. The new package can accommodate flash memory, which retains data even after the host device is turned off, and RAM (random access memory), which is used to display images stored on flash chips. Cell phones remain the biggest market for flash.

The chips are stacked vertically. To keep the height down, Intel files down the back of the chips.

The Wireless Memory System is designed mainly to hold Intel's StrataFlash line of memory chips. StrataFlash holds two bits per memory cell, double the amount of memory of regular flash chips.

Intel is the largest flash memory maker in the world, but 2003 has been a somewhat difficult year for its flash products. The Santa

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Clara, Calif.-based company raised its flash prices at the beginning of the year by up to 40 percent on some chips in the belief that demand would outstrip supply.

Instead, customers shifted to other manufacturers and Intel lost money. Meanwhile, rival Advanced Micro Devices absorbed its long-running flash joint venture with Fujitsu, a shift that could help AMD cut operational costs. Samsung, Toshiba and other manufacturers have also seen their market shares grow by specializing in NAND flash memory, a similar product based on a different architecture than Intel's NOR flash. Recently, Samsung landed a design deal with Nokia for flash, although it supplied Nokia with NOR flash.

Not all cell phone makers will need four memory chips and not all will want the same configuration, Nichols said. Some cell phone makers may request more memory for code, while others might want more storage.

Intel is sampling the packages now and will go into mass production by the first quarter of 2004. Phones with the packages will likely appear toward the end of the first quarter or early in the second quarter, Nichols added.