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In this paper, Advanced Adaptive Image Coding (AAIC) is proposed to increase compression performance for frame delay memory applications. The AAIC contains two techniques to improve the quality of decompressed images. The first is a Mean Adaptive Image Coding (MAIC) to reduce the impact of noise on image compression. The second is a Content-based Bit Exchange Technique (CBBET) to provide an adaptive bit distribution which improves the image quality while preserving fixed word length compression feature. Experimental results show that the proposed AAIC outperforms other coding algorithms used in the same type of application.