IBM and Infineon Technologies are working together to develop a radical new memory chip that could hypothetically replace the many types of memory chips in use today. The two companies, which will announce the effort Thursday, hope to speed development of Magnetic Random Access Memory (MRAM) chips. MRAM uses a magnetic charge -- similar to a hard drive's -- to store information, as opposed to the electric charge of existing memory forms. MRAM has several potential advantages: it could be cheaper than standard computer memory, known as DRAM, as well as faster than the speediest static memory. In addition, like the flash memory used in mobile phones and digital cameras, MRAM will not lose the information stored on it when it is removed from a power source. As a result, MRAM could be used in potentially every sort of electronic device and eliminate any of the trade-offs that come when designers must select among the current types of memory. "The key word is potential," said Bijan Davari, an IBM fellow and vice president of technology and emerging products. "In principal, it could do all of these things." The challenge now is to see whether MRAM can be reduced to a size at which it will be cheaper and faster than conventional memory. IBM, which has done most of the research behind the new memory chips, has already built sample chips to prove the technology works. While others such as Hewlett-Packard and Motorola have discussed the potential of the technology, IBM said it holds an advantage, given its experience in the development of hard disks, which also use magnets to store information. MRAM takes a compound similar to those used in hard drives and implants it on the same piece of silicon as a traditional chip. If IBM and Infineon succeed, they could position themselves to grab part of a huge market for memory chips. Research firm Dataquest predicts that sales of standard DRAM alone will reach $30bn this year, with the industry growing about 40 percent a year through 2002. The two companies could conceivably manufacture chips and license the technology to other chipmakers. IBM and Infineon will work to take the technology from the research lab into high-volume production. By the end of next year or early 2002, it should be clear whether the technology can be scaled down enough to make it feasible and whether the magnetic material can be worked into traditional chipmaking processes, Davari said. If all goes well, Big Blue believes the technology could be in commercial use by 2004. Dataquest analyst Jim Handy largely agreed with Davari's assessment. "It's a technology that I was at first a bit sceptical of," Handy said. "Seeing IBM get involved changes my perspective a bit." Improving memory technology has been a problem for the industry for years. While processors have doubled in power every two years, memory speed has improved only incrementally. Relief has come recently in the form of two new and competing types of high-speed computer memory: Rambus RDRAM and Double Data Rate (DDR) DRAM. A group that includes Intel, Infineon and other major memory makers was formed early this year to develop a standard that will emerge as early as 2003. Handy said that while MRAM may start to appear on a limited basis by 2004, it will likely be at least five years beyond that before it represents a serious threat to the various silicon-based memory chips. While MRAM sounds great in the abstract, the companies will face challenges when it comes to manufacturing, Handy says. He cites the example of ferroelectrics, a technology that has been touted for 20 years as an alternative to traditional silicon-based chips but has never made a serious dent in the market. "We've seen a lot of technologies that have held promise," Handy said. However, none have matched silicon in terms of cost and ability to be integrated with other parts needed in computers and other electronic devices. But if IBM is able to get the costs down, Handy said, MRAM is "something that the industry would sit up and take notice of". That's because as chips get smaller, the individual circuits hold less of a charge, making the chips harder to manufacture and increasing the risks of leaking current and other problems. Nonetheless, Davari said he expects some form of today's silicon memory to survive to battle against MRAM even if it does make it to market. IBM has been looking to beef up its chipmaking operations. The company said in October that it would spend $5bn to build a new chipmaking facility and expand existing plants to support its growing semiconductor business. See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta. Take me to ZDNet Enterprise Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.