Building A Better Computer Chip

Motorola Inc. has developed a computer chip it says is 35 times faster than today's models and will cut the cost of manufacturing electronics such as cell phones and DVD players, the company announced Tuesday.

The semiconductor combines silicon, the inexpensive material commonly used to produce semiconductors, and gallium arsenide, a more expensive material that can transmit signals at much higher speeds, according to Motorola.

The discovery solves a problem the semiconductor industry has been trying to solve for nearly 30 years. The technology should give consumers smarter, cheaper electronic products that perform better, the company said.

Motorola has applied for 270 patents for the materials and production process. The U.S. Patent Office is scheduled to publish the patent applications Tuesday.

“It's a monumental change in the constraints on the construction of semiconductor systems,” said Dennis Roberson, chief technology officer of Motorola. “We've opened the door on a whole new world.”

Analysts say the new chip is a breakthrough in technology because it allows relatively inexpensive semiconductors to process at high speeds. Products that previously demanded fast semiconductors had to use expensive materials. The new chips also allow one chip to handle more functions.

“This could go down in history as a major turning point for the semiconductor industry,” said Steve Cullen, director and principal analyst for semiconductor research at Cahners In-Sat Group, a technology research company. “This could obsolete current conventional wisdom that some products will always require at least two chips. Placing all components on the same chip also offers performance enhancements by eliminating the speed loss and power consumption that results from driving signals from chip to chip.”

According to Motorola, the new technology could drastically reduce prices of connecting high-speed optical networks for Internet and data communications to the home. It also could influence the development of new wireless devices, such as radar systems to help automobiles avoid collisions, and new semiconductor-based lighting systems.

The company said it hoped to license its discovery to other manufacturers widely and quickly.

Motorola expects demonstration versions will be available next year for other manufacturers. The first products with the new chips could hit the market in 2003.

Analysts say the development has the potential to turn around the financial state of Motorola's semiconductor unit.

“This looks like a pretty spectacular technology they've developed,” said Bob Merritt, vice president of Semico Research Corp. “The industry loves gallium arsenide, but they don't love its high cost and brittleness. Cheap and robust gallium arsenide will find a wide customer base.”

The company has been struggling to regain investors' confidence. It has announced 30,000 job cuts this yea and was hard hit by downturns in its cell phone and semiconductor operations.

In July, the company said it lost $232 million from operations, and $759 million including one-time expenses, in the second quarter on revenue of $7.52 billion.


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  • CBSNews.com staff CBSNews.com staff

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