(IT) IBM Develops New Phase-Change Memory Chips

Information Technology (IT) major, International Business Machines Corp. (IBM) recently announced that their scientists have succeeded in developing chips powered by a relatively new memory technology known as phase-change memory (PCM).

The new chips can reliably store multiple data bits per cell over extended periods of time. Till date, only single bit-per-cell PCM exhibits the desired reliability in data storage over a period of time, whereas no such results on multi-bit PCM have been reported.

IBM said that they have successfully developed the multi-bit chips by doubling the density of a chip and reducing errors when reading data.

The chips can store data 100x faster than existing NAND flash technology. They also have high storage capacities and the power to retain data even when the power supply is cut off.

Unlike flash, these chips are very durable. They can endure at least 10 million write cycles, compared to current enterprise-class flash at 30,000 cycles or consumer-class flash at 3,000 cycles. IBM plans to license the technology and expects the chips to be widely available by 2016.

PCM Technology Details

PCM is not a new technological breakthrough from IBM. PCM has been in use for some time and has most recently been looked upon as a green memory alternative for its ability to rapidly store large amounts of data without consuming much power.

PCM is made of the same material as CD disks and not classic transistors like flash memory. To write data on it, heat is applied to a memory cell. When it cools, the bit re-solidifies into one of two crystalline structures, depending on how fast the cooling takes place. The two different crystalline structures exhibit different levels of resistance to electrical current. These differing levels of resistance are ultimately read as “1s” or “0s” by the computer.

However, a drift occurs due to resistance changes as the chip’s alloy material shifts phases from the crystalline (low resistance) to the amorphous (high resistance) state, resulting in PCM errors. To overcome the drift issue, IBM scientists have applied an advanced modulation coding technique that is inherently drift-tolerant.

Using the technique, the IBM scientists were able to mitigate drift and demonstrate long-term retention of bits stored in a sub-array of 200,000 cells of their PCM test chip that was fabricated using 90-nanometer CMOS technology.

Our Take

With the increasing adoption of IT solutions all around the globe, growth in data consumption has been tremendous. This has led to bigger storage facilities and data centers, which consumes a lot of power and space.

According to a survey conducted by Gartner in late 2010, data volume growth was the biggest data center hardware infrastructure challenge for large enterprises, as 47.0% of the respondents ranked data growth among their top three challenges.

With the increasing spending on IT and rapid growth of virtualization and cloud computing, huge data centers have become a necessity in the global IT environment. Worldwide IT spending is expected to total $3.67 trillion in 2011, a 7.1% increase from $3.43 trillion in 2010, according to the latest outlook from Gartner. Spending on public cloud services are expected to grow at a compounded annual growth rate of 19% for the 2010-2015 period.

According to market research firm Infonetics, North American enterprises plan to increase their data center infrastructure spending by an average of 25% in 2011. Cloud technologies will play a major role in this expansion, and are among the top 3 expected data center changes.

We believe the increasing adoption of PCM technology will help in reducing the space and power required to maintain big data centers, thereby driving profitability for companies engaged in cloud computing.

We believe that IBM will boost top-line growth by licensing the technology. We continue to believe that IBM will benefit from its spate of new initiatives like smarter planet, business analytics and optimization, and cloud computing over the long term.

However, IBM continues to face stiff competition from a number of companies, including Hewlett Packard Co. (HPQ), Microsoft Corp. (MSFT), Oracle Corp. (ORCL) and EMC Corp. (EMC).

We remain Neutral over the long term (6-12 months) based on the belief that the company’s shares are fairly valued at current levels. Currently, IBM has a Zacks #2 Rank, which implies a short-term Buy rating.

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