IBM announced Thursday it has developed chip technology capable of producing transistors at 0.7 nanometers — smaller than 1 nanometer — making it the first company to publicly claim this milestone.
IBM stock jumped over 6% in premarket trading following the news. The stock had been down roughly 11% year-to-date heading into Thursday.
International Business Machines Corporation, IBM
The new chip uses what IBM calls a “nanostack” architecture. Rather than laying transistors flat on a surface, IBM stacks them on top of each other in three dimensions, fitting more computing power into the same physical space.
IBM Research director Jay Gambetta described it as “reinventing how chips are built to deliver dramatically more power and energy efficiency.”
The 0.7nm chip packs nearly 100 billion transistors onto a fingernail-sized chip. That is about twice the density of IBM’s own 2nm chip, which it unveiled back in 2021.
IBM says the new chip delivers up to 50% higher performance compared to existing designs, or alternatively, up to 70% greater energy efficiency — a key metric as AI workloads demand more power.
Intel last week said its 18A process, which produces 1.8nm chips, moved into risk production — the testing phase before commercial manufacturing. IBM’s 0.7nm announcement pushes further ahead on the density curve.
TSMC, the world’s largest contract chipmaker, remains the dominant force in advanced chip production. IBM’s announcement positions it more as a technology licensor than a direct manufacturer.
IBM has previously licensed chip technology to Samsung and Japan’s Rapidus. No manufacturing partner has been named yet for the 0.7nm process.
IBM says commercial production could begin within five years. That timeline is the sticking point for some investors.
Markets initially reacted positively, but the stock gave back gains as investors weighed the gap between a lab demonstration and actual revenue. IBM has no updated guidance or near-term commercial rollout to point to.
The concern is straightforward: breakthrough chip tech is expensive to develop and even more expensive to manufacture at scale. IBM carries a heavy debt load and has historically posted modest revenue growth, leaving little room for delays.
IBM’s free cash flow remains strong, which gives the company the financial ability to keep funding this research alongside its AI software and cloud businesses.
IBM said production could start within five years. No manufacturing partner for the new technology has been announced.
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