The Spansion Multi Chip Package is a mobile security chip which will be embedded in the flash memory chip package that the company offers to wireless handset makers. The chip will use a range of encryption, authentication, random number generation and other security features to ward off hackers, malware or thieves attempting to hijack a financial transaction or a user's service. It's will also back up data for speedy recovery.

The chip is a hardware system and not a layer of software added onto a handset, making it more difficult for thieves to tap into. Spansion says the hardware protection spans multiple zones of memory, such as separate, secured areas for the user, the operator, the content rights objects, and the handset manufacturer. The new chip achieves this by sharing memory space with user data.

If the chips are able to withstand hacker attacks over a period of time, they could encourage users to make more financial transactions with their handsets, including Internet purchases, attending auctions on eBay Inc., or using their handset like a credit card.

The company said its security chip can be used with any operating system or chip set, and a wide price range of handsets. It will be available to handset developers in the first half of next year.

Spansion says that the security chip will include a mechanism to lock a mobile phone's SIM card and render a phone useless if it's stolen. It will also ensure a phone continues to operate even if it has been infected with a virus by preserving the operating system and data inside. The chip will also add security for financial transactions and contactless payment in stores.