Compact holographic memory architecture with phase conjugate readout and diffraction suppression by internal reflection is investigated. The pixel size requirement for a competitive system is determined. The bandwidth of the holographic recording in LiNbO3 is broad enough to support the pixel size requirement by theoretical calculation and experimental measurement. Holograms of 1 mu m(2) pixel size binary data are recorded and reconstructed with this system. The pixel size limit, signal noise ratio (SNR) and the storage density for holographic recording in photorefractive crystals are discussed.