Just two months ago we were talking about Toshiba and their new 32 nm NAND flash memory, and though it was supposed to not see consumers' hands until the fall, it's now available in a limited capacity.
The flash memory will be available for mass consumption by July. The new process employed here uses a 32-gigabit chip, which is 4GB, and when stacked 8 tall, you end up with 32GB of total memory in one tiny space.
While we don't know who will receive the larger flash memory first, it does seem likely that Toshiba will be providing the memory for the iPhone 3.0. The company also notes that USB storage with the new memory capacity will be their first products to carry the 32 nm chip.