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IBM unveils world’s first 2 nanometer chip technology

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Darío Gil, IBM SVP and Director of Research, joins Yahoo Finance’s Alexis Christoforous and Kristin Myers to discuss the global chip shortage and its new nanometer chip technology.

Video Transcript

ALEXIS CHRISTOFOROUS: IBM has just taken the wraps off what it calls the world's first 2 nanometer chip technology for faster computing. The company says it has squeezed 50 billion transistors onto a chip the size of one's fingernail.

Joining us now is Dario Gil. He is senior vice president and director of research at IBM. Dario, thanks so much for being with us. So for laypeople like myself and not a techie, what is the significance of this rollout, and how much faster and more efficient are these chips than the mainstream chips already on the market?

DARIO GIL: That's right. So, look, in the end, behind the scenes of all our gadgets and computers and phones and cars, there is a building block that makes all of these possible. And behind the scenes there's a transistor inside our chips. And the way the semiconductor industry works is that we advance node by node.

And what we're announcing today is that we have a transistor and a technology that is going to make the 2 nanometer node viable. So what does it mean compared to today? So today, state-of-the-art manufacturing production in semiconductor is about 7 nanometers, the 7 nanometer node. And that's behind the scenes of the phones you use, et cetera.

So what we're going to be able to do is improve the performance of those phones and computers by about 45% in terms of the performance of each transistor. Or we could lower the energy consumption at the same performance level by 75%. So that would mean your phone could last, at the same performance level as is today, with one battery charge for four days, to give as an example.

KRISTIN MYERS: And Dario, how long will it take before we see this tech out on the market?

DARIO GIL: Today, so as I mentioned, production is 7 nanometer, 5 nanometer. So then we will have the 3 nanometer node and then the 2 nanometer node that we are announcing today. So I would say, you know, early versions of-- of production may happen towards the end of 2024. And then into 2025 is when we would start seeing this-- this tech really hitting high-volume manufacturing.

ALEXIS CHRISTOFOROUS: Dario, talk to us a little bit more about real-world uses for a 2 nanometer chip like this. You mentioned not maybe having to charge your phone for four days. I like that one. But what about other industries? I'm thinking space exploration, autonomous vehicles. When might we see these kinds of chips in those industries, and what kind of efficiency and power could it bring to them?

DARIO GIL: That's right. So-- so look, it's not that common that you see a technology that really ends up being behind the scenes of every industry. Because in the end, you know, computers and the basic building block of computing of the digital economy is a switch to zeros and ones behind these transistors. So they're going to show up in supercomputers. They're going to show up in our laptops, in servers and mainframes that power the transactional systems of the world.

They're going to show up in our cars to enable, you know, more efficient and better performing self-driving cars. They're going to show up on edge devices that there will be appliances in our homes and et cetera. And you mentioned space exploration. Of course they will be utilized on that.

So I literally cannot think of, you know, any sector, medical equipment as well, that-- where these advanced semiconductor capabilities will not be present. Because they're going to, in the end, as you mentioned, they will deliver better performance and better energy efficiency for these computing devices. And the history of computing is whenever there are better computer devices and better semiconductors, everybody always wants to use them.

KRISTIN MYERS: Dario, I hear what you're saying about the chip. It sounds incredible the things that we can expect once they are out on the market. Alexis was mentioning not being-- not having to charge your phone for several days. I also absolutely need that already now. Curious to know how big of an advancement, how big of a leap is this, this new technology that we're going to be seeing in this chip from what we have today?

I know that some advancements, at least in this space, seemed quite large at first. And it feels like they've been shrinking a lot lately. So how big of a leap forward is this?

DARIO GIL: Well, it's a big deal. I mean, it is the fruit of four years of, you know, the most intense form of research and development, right, with many hundreds of researchers and scientists, you know, working, you know, tirelessly around this in facilities that cause billions of dollars to be able to build, to achieve these kinds of things.

So it's a big deal technologically. It's not the kinds of announcements that happen, you know, every day. So for us, if you look at in the past, in 2015, we announced an equivalent technology platform for the 7 nanometer node. And now we're seeing that technology in production. We announced in 2017 the 5 nanometer node. And, you know, four years later now, there's achievement for 2 nanometers.

So it is-- it is a big deal because it's such a horizontal technology. And just a clarification is-- is what we're announcing here is not just, you know, a chip that we've built, but rather the core technology that enables the entire 2 nanometer node. And then that is used as the canvas with which designers and companies all over the world imagine their products and get built on that platform.

ALEXIS CHRISTOFOROUS: Dario, I know that you outsource some of your high-volume chips to-- to Samsung Electronics. Was this chip that you're now out with, this 2 nanometer chip, was this made solely in-house at IBM? Did you partner with anybody else?

DARIO GIL: Yeah, one of the beautiful things about the approach that we take in IBM for R&D in many areas, but in semiconductors specifically, in our Albany facility is that it's an ecosystem approach. And the way we develop each generation of technology for semiconductors is we partner with the entire ecosystem, basically equipment makers, you know, at companies like Applied Materials and Intel and beyond.

You have also material suppliers like JSR and then manufacturers like Samsung. And, you know, earlier this year, we announced a partnership also with Intel. So bilaterally, we work with each one of them. But cumulative, we develop, then, you know, the core technology for the next node. And all of those partners benefit from the licensing or the joint R&D work that we carry out. And cumulatively, all of us together enable the technology node to push forward.

So it is definitely an ecosystem approach. But at the heart of it, it requires breakthrough technologies that IBM takes a responsibility to make sure that we have for each generation, the next generation transistor and core technology.

ALEXIS CHRISTOFOROUS: Dario, from your perch there at IBM, can you tell us what this global chip shortage that we're all experiencing now, what that impact has been on IBM? A lot of experts we talked to here on the show say that we can see that shortage last another year, maybe even two years.

DARIO GIL: Yeah, that's right. I mean, it's-- it's both a reflection of just the essential nature of semiconductors for everything. I mean, for some people it is a surprise to imagine that when there is these shortages, all of a sudden manufacturing facilities for car makers, right, have to stop. So it is-- it is a testament of the vital importance of this technology to-- to basically every sector of the economy.

It is correct to assume that it will take a horizon of something like that, you know, a year, a year plus. The good news is that this industry is also, you know, very resilient and capable of adapting. But because of the complexity of the manufacturing process, it takes some time. So it will get better. And then more broadly even beyond that, you are seeing a lot of actions, you know, particularly in the United States, but you're seeing in other countries around making significant government investments to be able to shore up the manufacturing capacity onshore in the country.

So you may have heard about the CHIPS Act, which is being discussed. This has been introduced in Congress in the United States to be able to provide about $50 billion of investments to enable, you know, larger amount of manufacturing in the United States, as well as advanced R&D capability in the creation of a National Semiconductor Technology Center, something called NSTC.

So I think cumulatively, the actions of industry plus, over time, the larger levels of investments will ensure, you know, a much better environment for semiconductors around the world.