This paper presents a novel nonvolatile poly-Si-oxide-nitride-oxide-silicon-type Flash memory that was fabricated using hafnium oxide (HfO2) nanocrystals as the trapping storage layer. The formation of HfO2 nanocrystals was confirmed using a number of physical analytical techniques, including energy-dispersive spectroscopy and X-ray photoelectron spectroscopy. These newly developed HfO2 nanocrystal memory cells exhibit very little lateral or vertical stored charge migration after 10 k program/erase (P/E) cycles. According to the temperature-activated Arrhenius model, we estimate that the activation energy lies within the range 2.1-3.3 eV. These HfO2 nanocrystal memories exhibit excellent data retention, endurance, and good reliability, even for the cells subjected to 10 k P/E cycles. These features suggest that such cells are very useful for high-density two-bit nonvolatile Flash memory applications.