Quick chip

The chip, developed by the Memory Spot research team at HP, is 2-4mm square and current versions can hold up to 512 kilobytes of data.

HP said the amount of memory onboard the tiny chip was likely to grow in future versions.

Data can be moved in and out of the chip at speeds of up to 10 megabits per second - far faster than is possible with other short-range radio systems such as Bluetooth or Radio Frequency ID tags.

"This really bridges the digital and physical worlds," said Howard Taub, associate director at HP Labs. "The digital data is attached to the physical object it's related to."

Mr Taub speculated that the tiny chip could be used to identify drugs and spot fake pharmaceuticals or in hospitals to log all the treatment a patient has received.

Because the chips were so small and easy to make they could be embedded in documents as they were printed, stuck to any surface or made into a book of self-adhesive dots.

"There's no question that it has long-term potential," said Tim Bajarin, head of Californian market researcher Creative Strategies.

All the components to make the chip, including modem, antenna, microprocessor and memory, can be fabricated as a single unit helping to keep unit costs low. HP speculated that once in production the devices could cost as little as one dollar each.

No battery is needed because devices reading data from the chip will provide power by induction.

HP said it would show the chip to standards bodies in the hi-tech industry with a view to getting it widely adopted. It warned that the chip was at least two years away from commercialisation.

The Memory Spot chip has been developed over the past four years by researchers at HP's research laboratory in Bristol, UK.