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International Business Machines Corp. (NYSE:IBM) Announces Higher Capacity Chip

On Thursday, International Business Machines Corp. (NYSE:IBM) announced that it has created a fully functional and ultra dense computer chip that can handle four times the capacity of the most powerful chip in the market.

The company made the announcement on behalf of all the other entities that have been in partnership towards the project, including SAMSUNG ELECT LTD(F) (OTCMKTS:SSNLF). Other groups involved in the partnership were Global Foundries, equipment vendors and the New York State.

The successful project is a welcome relief for the technology industry that has been struggling to maintain the demanding trend of doubling transistors on a biannual basis (Moore’s law). It is also a bigger advantage especially for the mobile device industry as they compete to make smartphones that are more powerful.

Intel Corporation (NASDAQ:INTC) has been in the microchip industry for many years. The company has had its fair share of challenges throughout its journey and one of the recent worries is whether it will be able to maintain Moore’s Law. Most tech analysts did not think that microchip technology would go beyond the 14-nanometer generation of chips that are currently in the market.

Every generation of chip technology has been working to reduce the circuit area of the chips from the number in the previous ones. Based on the new breakthrough by IBM and its partnership, the biannual trend is expected to continue up to 2018. The company announced that the chip is not ready for mass production. Currently, it is still undergoing some final tests before advancing to the next phase of the project.

The new breakthrough is generating a lot of excitement in Silicon Valley and is expected to help achieve phenomenal feats in future devices. Though International Business Machines Corp. (NYSE:IBM) has disposed most of its semiconductor manufacturing capacity, it still hopes to make a significant impact towards technology. Intel is probably feeling the pressure since it has always been the leading microchip manufacturer in the industry. However, it is still early to make any inferences.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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