IBM Reports Sharp Gain in Chip Speed

IBM Corp. is perfecting a production process that it says will double semiconductor speeds in fiber-optic networks within a year. The largest computer maker said in June that the method will boost speeds by shrinking microscopic transistors made with the nonmetallic element germanium and silicon. IBM at the time forecast production of such chips by mid-2003 yet now says they may be ready for customers by early 2003. IBM has used the transistors to build a functioning chip circuit.

The new chips are 30% faster and less costly than those made from such substances as indium phosphide and gallium arsenide.

IBM also said it won a $4 billion, seven-year contract to supply American Express Co. with computer processing power and related services on demand, the way a utility sells electricity.