The move is an effort to promote the widely-used SD format as a platform for non-contact smart cards that can also be used to store large amounts of data.

The new card, which is called the Smart SD, will be available in sample quantities in December 2004, says Masaki Akiyama, director of Matsushita.

The goal is to produce a portable storage device that can also be used as a smart card.

The cards contain two sets of memory. One set stores personal and encrypted information that can be transmitted wirelessly, and used for personal identification and security purposes.

The other set is flash memory like that in conventional memory cards.

"The Smart SD Card has two key advantages over other smart cards: it will be able to contain a large amount of memory, and it is removable," says Go Nakano, GM of Matsushita's network service systems group.

The company may start selling the cards internationally after the Japanese launch, he adds.

Matsushita is developing a Smart SD Card that has a built-in antenna.

The company is also developing a version based on the Mini SD Card that requires an external antenna.

At the press conference, the company showed prototype versions of the new cards in 32MB, 64MB and 128MB capacities.

The cards conform to the GlobalPlatform international smart card standard, and the Java Card standard.

The new smart cards use ferroelectric memory (FeRAM), which has a number of technical advantages over the Electrically Erasable and Programmable ROM (EEPROM) that is widely used in smart cards, according to Matsushita.

Data can be written to FeRAM faster and at a lower voltage than to EEPROM, and FeRAM can be rewritten many more times, the company adds.

Matsushita hopes the success of the SD memory card will help the new format to become a de facto standard for removable contactless smart cards, Akiyama says.

Since the introduction of the SD Card in 2000, about 220 companies have announced over 2 600 products compatible with SD memory cards, according to Matsushita.

The SD memory card's share of the global memory card market will grow from 30% in 2003 to reach 36% in 2004, according to Matsushita, citing data from Techno Systems Research.

The number of smart cards issued in Japan is due to rise from 51m in 2003 to 340m in 2010, Matsushita says, citing a recent report by Yano Research Institute, another Japan-based market research company.

Nakano says that the new cards will be compatible with SD memory card slots. The flash memory data rate will be a maximum of 20MBps.