IBM's 2 nanometer CPU roadmap heats up chip manufacturer race

IBM made the latest leap in the chip manufacturing race, showing off its first 2 nanometer processor that it says will improve performance by 45% compared with 7 nanometer chips and use 75% less energy.

However, IBM doesn't expect the chip to be available to users until sometime in 2024, according to Mukesh Khare, vice president of hybrid cloud research with IBM. Khare said he is not concerned with the long delivery schedule, given the number of technology breakthroughs built into the chip.

"These breakthroughs enable us to start planning because now we know what is needed for the performance and density requirements we need," Khare said. "This allows us to have a very long roadmap from today through delivery."

IBM has crammed 50 billion transistors onto the chip, which is about the size of a fingernail, by employing its nanosheet technology. That technology features bottom dielectric isolation, which enables stacked nanosheet transistors for low power and higher performance applications, Khare noted. IBM plans to use the 2 nanometer chips in its Power servers and System Z mainframes.

The race among top-tier chip manufacturers to produce faster, more energy efficient chips has picked up speed the past several months. Intel, which will pour $20 billion into building two chip plants in Arizona to produce its next generation of chips, plans to invest an additional $3.5 billion to expand its New Mexico manufacturing facility. The added investment will be to focus on advanced packaging technologies.

Late last week, newly appointed Intel CEO Pat Gelsinger lobbied European governments to raise $9.7 billion in public subsidies that would go toward building a semiconductor plant that would help Intel better compete against Asian chipmakers in contract manufacturing.

One such rival is the Taiwan Semiconductor Manufacturing Company (TSCM), generally considered to be the world's largest chip foundry. It is working on a 3 nanometer chip for Apple to use in its iPhones and Macintosh systems due late this year or early next. Intel rivals Nvidia and AMD are also lining up at TSCM's door for the same chip.

TSCM has begun construction on its own 2 nanometer chip manufacturing plant, but has not given any time frame for delivery.

Still, one analyst doesn't believe IBM's lengthy roadmap for delivery of its 2 nanometer chips puts it an any particular disadvantage.

"In all likelihood, Intel and Samsung will use this technology and IBM will get a fee for that use," said Patrick Moorhead, president and principal analyst with Moor Insights & Strategy. "I can see IBM's 2 nanometer technology being competitive with TSMC's technology at that time."

While IBM has a rich tradition of achieving breakthroughs in chip technology going back decades, it hasn't always capitalized on these innovations monetarily. Many times, the company appears satisfied with the technology and patent royalties but doesn't pursue opportunities outside its own products.

[IBM's] innovations in this space haven't translated into massive revenues. This is an opportunity for them to up-level the transition from research to monetization.

"The interesting question with this chip is, will it be something IBM looks to monetize on a larger scale?" said Dan Newman, founding partner and principal analyst of Futurum Research and the CEO of Broadsuite Media Group. "Their innovations in this space haven't translated into massive revenues. This is an opportunity for them to up-level the transition from research to monetization."

While IBM's Khare envisioned implementations of the 2 nanometer chip ranging from cell phones to supercomputers, he did not offer up any names of vendors interested in integrating it.

"This chip covers the spectrum of systems, so whatever platform is chosen depends on the applications that meet their users' needs," Khare said. "This technology will be adopted appropriately."

With its significant boost in speed and energy savings, IBM sees the chip not only jacking up performance of its own servers, but also being a contributor to accelerating AI-based application development, 5G and 6G adoption, edge computing platforms and quantum computing.

IBM will rely on longtime partner Samsung to manufacture the chip. In late March, IBM signed a deal with Intel to collaborate on researching next-generation logic and packaging technologies for chips, which will include the 2 nanometer offering. The goal of the research is to accelerate semiconductor manufacturing innovations across the ecosystem to stay competitive with Asian chipmakers.

As Editor At Large with TechTarget's News Group, Ed Scannell is responsible for writing and reporting breaking news, news analysis and features focused on technology issues and trends affecting corporate IT professionals. He has also worked for 26 years at Infoworld and Computerworld covering enterprise class products and technologies from larger IT companies including IBM and Microsoft, as well as serving as Editor of Redmond for three years, overseeing that magazine's editorial content.