A Silicon Valley start-up will try to popularise one of the more intriguing ideas that has been tossed around computer labs for years: circuits configured in three dimensions. Later this year Matrix -- which has received strategic funding from Sony, Eastman Kodak and Microsoft, among others -- will release memory chips that contain many more layers of circuitry than ordinary chips. As a result, Matrix's chips resemble microscopic cubes rather than two-dimensional planes. "There is no wasted space in the silicon," said Tom Lee, one of the company's founders and a professor at Stanford University, who likened the design of Matrix's chips to origami sculptures. Matrix's technique, though, is more than just a research trick. By building up, Matrix can shrink the chip footprint and thus squeeze far more chips out of a single wafer, potentially cutting costs. Just as significant, the company said it has designed the chips so that they can be made with current manufacturing techniques. The company has also used existing research to a great extent. For instance, Matrix borrowed many vertical chip concepts from the flat-panel display industry, which has mass-produced layered silicon films for years. "We tried to avoid the temptation of the exotic," Lee said Tuesday. "When you first tell people this, the general reaction is, 'That's impossible. Or that's stupid.' When you tell them how it's done, they say, 'Then why are you the first one to do it?'" Lee, who is Matrix's director of advanced development, has previously worked for chip companies Rambus, Advanced Micro Devices and Digital Equipment. Rich Wawrzyniak, an analyst at Semico Research, said that although Matrix will have to prove it can mass-produce these chips, the concepts are intriguing. "This bears notice," he said. "If they can make this work for memory, there is no reason they can't do it for other products." The concept of 3D chips has been around for years, driven primarily out of a fear that Moore's Law will hit a wall. Under Moore's Law, chips steadily shrink in size and become denser with transistors. At some point, though, it won't be physically possible to compress more transistors into a given space, so designers will have to come up with others ways to allow chips to continue to become more powerful. Climbing vertically is one way to add real estate, Lee said. To a certain degree, chip designers already layer circuits. But Matrix extends the concept by adding many more layers. Although several universities conducted 3D chip experiments in the 1980s, most of them failed because the chips required exotic materials or contained unusual designs. In addition, chip designers found ways to shrink transistors and kept the venerable Moore's Law alive. Matrix, in fact, was founded in 1998 when fellow company co-founder Mark Johnson asked Lee about all of the 3D experiments from 20 years ago that never seemed to materialise. Johnson, who is Matrix's director of product development, had previously worked for Rambus, Transmeta and AMD. The flat-panel monitor industry has eased the way for Matrix. Flat panels are essentially interconnected layers of transistors. The experience and techniques developed in that industry has been incorporated into Matrix's designs. The company's first chips, called Matrix 3-D memory, are expected to appear next year inside removable memory cards that consumers use for recording or storing media such as music or digital photos. Companies such as Sony and Toshiba currently use flash memory in their removable memory cards. Although Matrix's memory will function in a similar manner, the company said it should cost less. A 64MB Matrix memory card will sell for about $10, Matrix said. Similar flash memory cards now cost $38 or more. Lee added that Matrix's chips will fit in the same packages as current flash, so there won't be an infrastructure mismatch. The company would not reveal which companies will adopt its memory, but Lee said they are household names. Another company representative pointed out that Sony and Kodak are strategic investors. Engineering samples of 64MB chips have been produced. Commercial mass production has yet to begin. Taiwan Semiconductor Manufacturing will make the chips on behalf of Matrix. Despite the intensely competitive nature of flash memory, Matrix should be able to hold its own in terms of manufacturing costs because its chips will be substantially smaller than competing products. "We are leveraging off everyone's investments in 2D, but we have the secret sauce of 3D," he said. While the concept is intriguing, the company's fate will largely hinge on how easy the chips prove to manufacture. "It all comes down to yield," Wawrzyniak said. ZDNet UK's Rupert Goodwins contributed to this report. See Chips Central for the latest headlines on processors and semiconductors. To find out more about the computers and hardware that these chips are being used in, see ZDNet's Hardware News Section. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chips Central forum Let the Chips Central editor know what you think by email. And read other letters.