Over the weekend, Intel and IBM announced separately their solutions to heat-related challenges involving Moore's Law -- the ability to double the number of transistors on a chip about every two years -- by replacing the use of silicon dioxide as an insulator with various metals and a new material collectively called "high-k and metal gate", resulting in improved performance and better energy retaining. Intel said it believes it has more than a year lead over competitors in 45nm processors and expects production to begin in the second-half of this year on its "Penryn" codenamed 45nm family of products. Intel co-founder Gordon Moore said this is the "... biggest change in transistor technology since ... the late 1960s." IBM announced it plans to apply its technology to products with chip circuits as small as 45nm from 2008. The research director at Envisioneering Group commented, "Intel will be the first to have this in production, but IBM could potentially have a density advantage compared with Intel's scheme." Shares of Intel gained 1.75% to close at $20.89 yesterday; IBM +1.12%, $98.54; AMD -1.66%, $15.95; ASM Int'l, reportedly a supplier to Intel of a product in "high-k gate", -0.23%, $22.00.
• Sources: Intel press release, IBM press release, BusinessWeek-AP
• Related commentary: Color On Intel's Transistor News: ASM Supplying Tools?, Intel's Shrinking Chips: Goodbye Silicon Dioxide, Intel Back In Server Driver's Seat After Sun Deal. Conference call transcripts: Intel Q4'06, IBM Q4'06, AMD Q4'06
• Stocks and ETFs to watch: Intel (INTC), [Reported Intel supplier] ASM International (ASMI), IBM (IBM). Competitor: Advanced Micro Devices (AMD), [IBM's transistor dev. partners inc. AMD] Sony (SNE), Toshiba (OTC:TOSBF). ETFs: Semiconductor HOLDRs (SMH), iShares Goldman Sachs Semiconductor (IGW), PowerShares Dynamic Semiconductors (PSI), SPDR Semiconductor (XSD), Technology Select Sector SPDR (XLK)
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