Probably it is a smallest SD music player in the world based on AtinyX5 microcontroller series. Its size actually is limited to SD card which sits on back of PCB.
Microcontroller generates sound with PWM that can be driven to speakers directly. AVR tiny microcontrollers have very little RAM so handling FAT file system is quite a task. There is a Petit-TatFs module used which is developed for small memory systems with less than 512 bytes. SD music player is able to play wave files 8/16-bit mono and stereo at up to 48kHz sampling rate. I is really cheap solution to add in to gifts, toys and anywhere where small size and simplicity is required.