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The computer services and technology company said the new process allows the wiring on a chip to be insulated with a vacuum, replacing the glass-like substances used for decades but which have become less effective as chips steadily shrink.

It is the latest achievement for IBM researchers, who have announced a number of advances in recent months allowing chips to get smaller despite challenges posed by physical laws at those tiny dimensions.

'This is one of the biggest breakthroughs I've seen in the last decade,' said John Kelly, IBM's senior vice president of technology and intellectual property.

'The holy grail of insulators is to use vacuum and we've broken the code on how to do this,' Kelly said.

The technique works by coating a silicon wafer with a layer of a special polymer that when baked, naturally forms trillions of uniformly tiny holes just 20 nanometers, or millionth of a millimetre, across.

The resulting pattern is used to create the copper wiring on top of a chip and the insulating gaps that let electricity flow smoothly. A similar process is seen in nature during the formation of snowflakes, tooth enamel and seashells, IBM said.

'The problem they needed to solve was how to create lots of deep little

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wells in the insulation area between the wires,' said Nathan Brookwood, who runs Insight 64, an industry consultancy.

'Typically, whenever they tried, they ended up making a chip that was like Swiss cheese and had no mechanical integrity,' Brookwood said.

The self-assembly process already has been integrated with IBM's state-of-the-art manufacturing line in East Fishkill, New York and is expected to be fully incorporated in IBM's manufacturing lines and used in chips in 2009, although Kelly said that the company has already made prototypes based on existing designs and it could employ the technique sooner. The process will first be used to build chips for IBM's server product lines and then in chips IBM builds for other companies.

'This is the first time anyone has proven the ability to synthesise mass quantities of these self-assembled polymers and integrate them into an existing manufacturing process with great yield results,' said Dan Edelstein, IBM Fellow and chief scientist of the self-assembly airgap project. 'By moving self assembly from the lab to the fab, we are able to make chips that are smaller, faster and consume less power than existing materials and design architectures allow.'

IBM will also 'selectively license' the technology to partners.

Last month, IBM said it had found a way to stack the components of a chip on top of each other, making them faster and more energy efficient by cutting the distance an electrical signal needs to travel.

In January, the company said it had solved a long-standing obstacle in drastically cutting electricity leakage in chips. That announcement - made alongside a similar but separate one by Intel - was hailed as the biggest advances in transistor technology in four decades.