IBM’s Innovation Pushes Chip Industry

IBM Corp.’s development of computer chips wired with copper instead of aluminum gives it a clear lead in the race to make the next generation of semiconductors.

But competitors are hot on IBM’s heels in working to develop similar processes and may now redouble their efforts, analysts said.

IBM’s “isn’t a revolutionary move,” said Drew Peck of Cowen & Co., “but it certainly is a material event. It is something that will serve as a wake-up call to every other mainstream semiconductor manufacturer, who are going to need that process.”

IBM said on Monday that the new technology, called CMOS 7S, will eventually lead to smaller and faster chips. Its engineers have been working for a decade on a process for manufacturing with copper, which it expects will replace aluminum after 30 years as the material of choice.

When the technology is made available early next year, semiconductor customers will come to them with specific designs that will be implemented using the process.

But analysts said other chip makers have also been working on the process, seen as inevitable in the semiconductor’s evolution.

“You can bet that every head of R&D; [research and development] at every semiconductor company is perusing this, trying to decide whether IBM can actually implement this commercially in a matter of months or whether it will be years,” Peck said.

He estimated that the more aggressive chip makers are six months to a year behind IBM, a significant period in the business.

Jim Feldhan, president of Semico Research Group, said that the customers who would benefit soonest from IBM’s process are makers of highly integrated logic devices such as divisions within Texas Instruments and Motorola Inc.

Shares of Armonk, N.Y.-based IBM rose $4.63 to close at $103.88 on the New York Stock Exchange.