Breakthrough IBM chip seen ready

NEW YORK (CNNMoney.com) -- IBM plans to unveil a prototype chip based on optical technology that would allow transfers between chips up to eight times faster than current processors, said a report Monday.

The new chip operates at 160 billion bits of data per second, allowing large files to be transferred between chips in fractions of a second, said the Wall Street Journal.

The chip could facilitate products that demand fast transfer rates, such as a hand-held device for doctors that could instantaneously view a digital X-ray, said the report.

Analysts said the prototype chip marked a breakthrough in combining semiconductor and optical technology.

Products using the new chips are likely to appear within three years, an IBM spokesman told the Journal.

Shares of IBM (Charts) closed Friday at $95.03 on the New York Stock Exchange and inched upward in premarket Monday trade. Both IBM and rival HP have posted big gains in the last six months - IBM is up 16 percent while HP (Charts) has gained 13 percent.

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