April 2 (Reuters) - Toshiba Corp plans to spend about 15 billion yen ($159.8 million) this year to build a test production line for NAND flash memory chips of less than 25 nanometers, the Nikkei business daily reported.

Toshiba hopes to kick off mass production of the chip as early as 2012, the report said without citing sources.

The company will install the line at the fourth fabrication facility of its key NAND flash memory plant in Yokkaichi, Mie Prefecture, the report said, adding Toshiba must upgrade its exposure technology to make the smaller chips.

Current technology can churn out flash memory in sizes as small as the upper 20s. But making sub-25nm chips requires extreme ultraviolet lithography, which uses shorter wavelengths, the paper said.

Presently, 45nm and 32nm NAND flash memory chips, used in devices such as mobile phones and digital cameras, are the mainstay.

Toshiba has already ordered special equipment from Dutch firm ASML Holding NV, and has also decided to start work on a fifth fab at the Yokkaichi plant this summer, the report said.

Toshiba and other semiconductor manufacturers will begin volume production of chips in the upper 20s this year and begin mass production of the smaller versions in two years, the Nikkei report said. ($1=93.86 Yen) (Reporting by Bijoy Koyitty in Bangalore; Editing by Gopakumar Warrier)