NEW YORK (CNNMoney.com) - IBM announced it has developed a new technology that's designed to increase the security of laptops, portable digital assistants and other devices that contain sensitive information.

Code named "SecureBlue," the technology will be embedded inside the microprocessors that live in laptops, BlackBerrys and other electronic devices containing potentially sensitive information. Unlike other data security solutions, IBM's (down $0.05 to $82.43, Research) technology is actually built into the hardware of these devices to protect against data theft, the company said.

The technology is meant to protect against the theft or loss of sensitive data, including medical information, consumer financial data and government data such as intelligence or military applications.

Last month, a laptop containing data on 196,000 retirement accounts was stolen from Fidelity Investments. The laptop contained information including the names, Social Security numbers and compensation of employees at computer maker Hewlett-Packard (Research). Fidelity said the information was only available through a program whose license had expired, meaning that the data would be scrambled and unusable.

"These are the exact type of events that Secure Blue can prevent," said Tim Ravey, a vice president in IBM's Technology Collaboration Solutions division.

The technology will protect data even if the device containing sensitive data falls into malicious hands, according to IBM.

The technology is stored in circuits that are added to the microprocessor. The circuits contain sensors than can detect a physical attack on a device in the event that a thief tries to retrieve the chip from a laptop or BlackBerry. Ravey said removing chips from devices is a last resort if thieves cannot hack into the system. Once an attack is detected, all the circuit's encryption keys are automatically erased – meaning that the data cannot be retrieved.

"If somebody steals your BlackBerry or laptop and those devices have SecureBlue – if someone tries to access that, the data will turn into garbage," said Ravey.

IBM will embed the technology on its own processors, but it will also license the technology to other chip makers.

Ravey said the technology, which is in production for one IBM client already, could have myriad applications as consumer data is increasingly stored electronically. One example he cited is a move within the U.S. government to migrate toward electronic passports.

"If you lost that passport, nobody else could steal it or get that information from you" if the passport was protected at the chip level, Ravey said.

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Laptop with Fidelity data stolen: More here.

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