Intel claims 3D chip revolution

Intel has claimed the biggest breakthrough in microprocessor design in more than 50 years, raising the stakes significantly for rivals in the increasingly capital-intensive global chip industry.

The world’s biggest chipmaker said on Wednesday that it would begin producing chips this year using a revolutionary 3D technology that has been nearly a decade in the making, and which it said would act as the foundation for generations of computing advances to come.

Microchip transistors, the building blocks of electronics, have to date been produced in flat structures – akin to printing on a sheet of paper. Intel’s breakthrough involves producing more complex three dimensional transistors on chips.

The new technology is one of Intel’s biggest gambles in the race to maintain and even extend its long-standing lead over other chipmakers in making components smaller and faster, while breathing fresh life into the remorseless cycle of chip improvements on which the modern computing and electronics industries are founded.

The impact of Intel’s attempt to push ahead of the rest of the industry was felt more widely on Wednesday, as Applied Materials, which supplies Intel with manufacturing equipment, announced a $4.9bn acquisition to keep up with the new technology.

The US equipment maker said it would buy Varian Semiconductor Equipment for $4.9bn to give it the capability to handle chips of greater complexity than those whose circuits are only 22 billionths of a metre wide – the scale at which Intel said it would begin manufacturing before the end of this year.

Intel called its new chip design the most significant advance since the introduction in the 1950s of the transistor, the fundamental building block in electronics. It said the breakthrough would also extend Moore’s Law – the accurate 1965 prediction by Intel co-founder Gordon Moore that the number of transistors on a chip could be doubled roughly every two years.

That exponential rise in processing power has formed the basis for the steady advances in electronics since, though many in the industry fear that the chipmakers are approaching the limits of their ability to continue the improvements.

“For years we have seen limits to how small transistors can get, this change in the basic structure is a truly revolutionary approach,” said Mr Moore in a statement.

“Amazing, world-shaping devices will be created from this capability as we advance Moore’s Law into new realms,” said Paul Otellini, Intel chief executive.

Martin Reynolds, of the Gartner research firm, said: “Its a big deal, they seem to be well ahead of the rest of the industry. At the low end, the chips can help make mobile devices that need less power and at the high end they can make servers more powerful ... this could help persuade the industry to use Intel’s chips.”

Applied Materials announced that its agreement to acquire Massachusetts-based Varian for $63 per share in cash – a 55 per cent premium to its closing price on Tuesday – was aimed at helping it solve the problems of ever increasing chip complexity, transistor scaling and 3-D designs.

Shares in Intel closed up 1.95 per cent to $23.50.

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