Will IBM Turn the Chip Industry On Its Head?

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IBM (NYSE:IBM) is reporting having made a major step forward in its search for a replacement for today’s silicon chips that could change the microchip landscape as we know it. The chip-making technology now being developed will likely ensure the shrinking of the size of the basic digital switch at the center of modern microchips for more than a decade to come.

IBM is using carbon nanotubes as a replacement for silicon as a semiconductor. Carbon nanotubes have the same on-again off-again electrical properties crucial to making chip transistors. IBM announced on Sunday that a team of eight researchers had discovered how to precisely place carbon nanotubes on a computer chip, a development that allows them to arrange the nanotubes 100 times more densely than earlier methods. IBM has built a chip with more than 10,000 carbon nanotube-based elements.

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The technique means the nanotube now has a better chance at becoming the new industry standard once today’s silicon transistor technology grows stale.

Chip makers have routinely doubled the number of transistors that can fit on the surface of a silicon wafer by shrinking the size of the tiny switches that store and route the ones and zeroes that are processed by digital computers in a process known as Moore’s Law, named after Intel (NASDAQ:INTC) co-founder Gordon Moore. In 1965, Moore noted that the industry was doubling the number of transistors it could build on a single chip at routine intervals of 12 to 18 months.

Intel’s new Ivy Bridge Core processors, which can be found in many new PC models, have transistor elements measuring 22 nanometers, or billionths of a meter, and Intel thinks it can shrink that over several generations of improvement down to 5 nanometers, but beyond that, processors will likely need to be built with very different technology if they are to continue to shrink.

That’s where IBM’s research comes into play. Carbon nanotubes are exotic molecules that have long held promise as an alternative material to silicon. IBM researchers at the T.J. Watson Research Center in Yorktown Heights, N.Y., have been able to pattern an array of carbon nanotubes on the surface of a silicon wafer and use them to build chips that are hybrids of silicon and carbon nanotubes with more than 10,000 working transistors.

The silicon chip has been the industry standard while continuing to improve in both speed and capacity for the last five decades. However, in recent years, there has been growing concern that the technology will ultimately hit a wall. And the end of the microelectronics era would impact a number of different industries that have fed off the falling cost and increasing performance of computer chips.

That concern has sent chip companies on a quest to find an alternative to silicon, and it looks as though IBM might be the first to find it. The advance, first described in the journal Nature Nanotechnology on Sunday, is significant because the chip-making industry has not yet found a way forward beyond the next two or three generations of silicon — which means the long-feared end of microelectronics could come in the next few years.

If its research ultimately leads to a new chip category that will be able to evolve as did silicon-based chips before it, not only will IBM have a highly lucrative product on its hands, but companies like AMD (NYSE:AMD), though initially faced with heightened competition, will be able to stay alive, with room to grow. PC makers like Apple (NASDAQ:AAPL) that are continually trying to improve upon the performance of their desktops, laptops, and even mobile devices, also have a lot riding on the outcome of IBM’s research.

Of course, carbon nanotubes aren’t the only alternative to silicon now being tested, though so far that research has been the most promising. Other technologies are being tested by other companies. Graphene is one promising material being explored, as is a variant of the standard silicon transistor. It’s very possible a competitor will beat IBM to a solution, but the strides detailed in Sunday’s Nature Nanotechnology put IBM in the lead.

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