This option instructs the compiler to generate code for an MSP430 with with 64 kilobytes of code memory (a compact model) or up to 1 megabyte of code memory (a large model). If you generate code for a standard MSP430 processor that cannot support a large address space, this option is ignored.

For some processors, such as the CC430, although they have an MSP430X core, they do not have code memory that extends beyond the first 64 kilobytes of the address space. In this case it is beneficial, in terms of code space, data space, and execution time, to use the compact memory model which limits the total address space to 64 kilobytes.