IBM has unveiled a breakthrough in microchip technology that will speed the introduction of hand-held personal computers capable of linking to the Internet and allow mobile phones to become even more compact. IBM says it has perfected a technique for producing silicon on insulator, or SOI, a manufacturing process that greatly reduces the power silicon chips require to operate.

The technology will allow the creation of "entirely new classes of portable devices", the company says. The idea of pocket-size PCs has remained a fiction largely because of the power needed to drive high-speed chips. Companies have been conducting research into SOI for 15 years, but have failed to find an economic way of manufacturing such chips.

IBM says its method will boost the operating speed of chips by 30 per cent and cut the power they use to about one-third of current levels. The increase in speed offered by such chips will accelerate the introduction of demanding computer applications, such as voice recognition, and the lower power requirements will allow battery-operated devices, such as portable telephones, to run for much longer.

IBM says SOI will open up the possibility of combining high-speed computing with wireless telephony to create pocket machines that link to the Internet giving access to email and the World Wide Web.

The uses for such devices would be widespread for example, for researchers working in the field. IBM said it hoped to have the first SOI chips in manufacture within a year. It said production costs would initially be about 10 per cent higher than standard chips, but that gap would close.

The SOI process involves inserting a layer of insulation underneath a chip's micro-circuits to reduce its capacitance the electrical charge needed to power the circuits.