IBM believes that a device which would be stable at room temperatures would require 150 to 200 atoms.
A scanning tunnelling microscope was used to arrange the atoms in such a way that their magnetic properties did not interfere with the properties of neighbouring atoms which is often the case in small geometry magnetic memories.
Below 12 atoms, IBM believes, quantum effects will make the technology unviable.
44 years ago, IBM's Bob Dennard, invented the DRAM which remains the largest selling memory on the market.
The 12 atom bit is 400 times denser than the space taken to store an advanced DRAM bit today.
IBM is one of the last of the world's great industrial labs doing fundamental research. Last year, the company topped the world's patent league for the 19th year in a row with 6,180 patents, according to IFI Claims Patent Services, with Samsung in second place on 4,894.
The next three top patent gatherers were Japanese - Canon on 2,821, Panasonic on 2,559 and Toshiba on 2,483.
Three other Japanese companies were in the top ten: Sony in seventh place on 2,286, Seiko Epson in eighth place on 1,533 and Hitachi in tenth spot with 1,465.
The other two companies in the top ten were Microsoft at No.6 with 2,311 and Hon Hai Precison in 9th spot with 1,514.
IBM's annual R&D budget is $6 billion and it makes licensing fees of about $1 billion a year.
Samsung is catching up. It has filed more patent applications than IBM for the past two years.