The prospect of computers which can hold a conversation came a step closer this week with the introduction of a new high-speed computer chip from Analog Devices, the US technology group.

The company unveiled its new Sharc digital signal processor (DSP) which it said was capable of making more than one billion calculations a second.

This is 10 times faster than its previous generation of DSPs and in theory could allow computers to understand a wide vocabulary of human speech independently of the person talking.

Current voice recognition systems tend to be limited to understanding either one individual or a limited number of sentences.

Mr Tom Starnes of Dataquest, the market research group, said the new chip could help Analog win back market share in the rapidly growing $3.5 billion (£2.5 billion) market for DSPs. DSPs are chips which allow computers to recognise signals from the real world such as sounds and images as well as electronic signals such as radio waves, radar and ultrasound.

Mr Starnes said that despite the new chip's capabilities, it would be some time before an effective voice recognition system was developed that would have a significant advantage over either communicating through a touchtone phone or talking to a human being.

However, there were other applications for the new chip such as processing signals from radar and medical imaging equipment.

The company said the first version of its new chip would be for use in telephone networks.

Analog Devices has met fierce competition from Texas Instruments, which has a 45 per cent share of the DSP market.