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IBM Unveils Chip Innovation

IBM's stock climbed Monday morning after the company announced it has developed a method for making faster computer chips that uses far less power than conventional semiconductors.

The news had a bigger impact, however, on tiny Ibis Technology Corp., whose stock jumped 30 percent. The Danvers, Mass.-based company sells silicon wafers used to make chips involved in the new process. IBM's new chips will be based in part on technology developed by Ibis.

Ibis' stock jumped 2 1/2 to 11 1/4 on trading volume 16 times its daily average daily. The technology, known as silicon-on-insulator, improves chip performance by up to 35 percent and reduces energy usage by as much as one-third vs. the industry standard, IBM said.

Slated for mass production in the first half of 1999, the chips are targeted for use in servers and mainframe computers as well as personal devices such as cell phones and laptops.

The technology "represents a fundamental advance in the way chips are built," IBM said.

Shares of IBM, a component of the Dow Jones Industrial Average, rose 1 1/8 to 133 5/8 on heavy volume.

IBM said it developed a way to apply insulation material between each transistor and the silicon base of chips, reducing electrical interference that saps energy and performance.

Using the new technology, a computer microprocessor designed to run at 400 megahertz could run at well more than 500 MHz.

IBM started making the new chips in a test program at its East Fishkill, N.Y., factory and will extend the process to its Burlington, Vt., plant by next summer. The chips will be used in IBM's own computers as well as chips it sells to other companies.

While other companies also have been working on the technology, IBM said it would be the first to commercially introduce it.