Why IBM's Breakthrough 7-Nanometer Chip Matters To Partners

IBM said Thursday it has built an ultra-dense 7-nanometer chip that delivers four times the compute power than what's currently available today. The processor, which uses transistors only about three times larger than a strand of DNA, is being developed in partnership with GlobalFoundries, Samsung and SUNY Polytechnic Institute's Colleges of Nanoscale Science and Engineering.

The chip will be used to power a variety of products, according to IBM, including its Watson supercomputer, cloud data centers and mainframes. The Armonk, N.Y.-based company said it has earmarked $3 billion in research and development over the next five years to bring the chips to market.

"This speaks to IBM's prowess in the dense computing platform. That's where the cloud is today and where IBM needs to be headed," said Ron Shink, CIO of Oxford Network, a Lewiston, Maine, IBM partner.

[Related: Intel, IBM Squabble Over 'Open Chip' Claims]

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IBM competes with Intel when it comes to database server processors and architecture. While Intel dominates the market with its x86 chips, IBM has developed its Power8 microprocessor platform in conjunction with efforts of the OpenPower Foundation, whose members include industry heavyweights such as Google, Nvidia and Rackspace.

"This solidifies IBM's position in the data center," Shink said. "It will also keep it on the leading of edge of running applications more efficiently on the Power cloud platform," he said.

At the end of the day, partners said, data center dominance is tied to application performance and IBM delivering on a 4X performance gain will give them an edge.

"I would love to see system builders on the cutting edge of technology like this," said Todd Swank, senior director of product marketing at Equus Computer Systems, a Minneapolis-based system builder. "It's a good thing for everyone, for system builders as well as consumers and users of technology. If IBM is making advances like this, companies like Intel will soon be able to do it as well in one way, shape or form," Swank said.

A 7-nanometer microprocessor bests dominant chip maker Intel’s current commercial 14-nanometer Broadwell processors, unveiled in June. IBM said it was able to accomplish the 7-nanometer milestone by using a silicon-germanium alloy instead of silicon to make molecular-size switches.

For its part, Intel, Santa Clara, Calif., has maintained it's on a path to 7-nanometer processors. Last year, Intel Fellow Mark Bohr said the company would use extreme ultraviolet lithography to achieve a 7-nanometer generation chip. Intel has said it plans on a commercial release of a 10-nanometer processor as early as next year.

The battle to build smaller processors is an important one in the semiconductor industry, which for years has struggled to keep pace with Moore’s Law, which predicted that the number of transistors in a microprocessor would double every two years.

The chip breakthrough would allow developers to bring to market faster, smaller chips at a lower cost. IBM gave no indication as to when the chips would be commercially available.

LINDSEY O'DONNELL contributed to this story.