The usual way to increase the capacity of a chip memory is to reduce the size of the transistors. The principal disadvantage is that it needs a heavy investments in R&D and it is limited to existing technologies. Another, which in is still at its beginnings consists in piling up layers of transistors and interconnecting them in order to make only one chip. This is what Samsung has done an d they have announced a chip of 32 GB made up of 8 layers of 4 GB. Each layer is engraved in 30 nm and the whole thing is only 0,6 mm thick. The market intereested in this is that of the mobile phones primarily or that of the mp3 players such as the iPod Touch. One day one will be able to perhaps use these chips to manufacture SSD.
If one puts 20 in a 2,5" package, it will reach 640 GB :)