April 12 (Bloomberg) -- International Business Machines Corp., the world's largest computer-services company, said it will start selling chips next year that can be stacked on top of one another, enabling smaller and faster processors.

IBM developed a technique that lets memory chips sit on top of processors, allowing them to share data directly, said Lisa Su, head of chip research at Armonk, New York-based IBM. That shortens the distance information on a chip needs to travel by 1,000 times.

IBM and competitors such as Intel Corp. are trying to find new technologies to speed up the flow of information between components to make computers faster and to persuade consumers and corporations that it's worth upgrading to new machines. The faster flow of data between chips will make IBM's supercomputers and servers more competitive, Su said in an interview.

``It's getting harder and harder to continue adding functions to chips,'' Su said. ``This gives us a new degree of freedom. We are not limited by what you can put on a single chip.''

IBM will provide samples of the new chips to customers in the second half of this year, with full production starting in 2008. The technology will first be used in chips for wireless networks, and in three to five years the technology will be in IBM's most advanced microprocessors, used in supercomputers, Su said.

Bottleneck

The chip-stacking technique eliminates the need for metal wires that connect chips together, boosting the speed at which data flow. The new technique, research for which has taken about a decade, involves drilling a hole through a chip and filling it with metal.

Memory chips store data in computers and other electronic devices while processors manipulate data, making calculations needed to operate software. The transfer of information between processors and memory chips has become a bottleneck.

Intel, the world's largest chipmaker, will discuss its plans for stacking technology at the Intel Developer Forum in Beijing next week, according to spokesman Tom Beermann. Intel is based in Santa Clara, California.

Shares of IBM advanced 51 cents to $95.67 at 4 p.m. in New York Stock Exchange composite trading. Intel added 3 cents to $20.50 on the Nasdaq Stock Market.

To contact the reporter on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

Last Updated: April 12, 2007 16:15 EDT