The present invention abandons the conventional approach of incrementing bits-per-cell b by 1, but allows increments of states-per-cell N by as little as 1 between product generations. Because N is no longer an integral power of 2, b takes a fractional value, resulting in a fractional-bit system. In a fractional-bit system, cells are decoded in unit of word. By adjusting the word-width, the system efficiency can be optimized. Hybrid N-ary system can be used to improve manufacturing yield and endurance lifetime.