With Intel planning to move to 32nm process technology by end of 2009 leaving other chipmakers behind. IBM has formed partnership with Samsung, STMicroelectronics and others to develop next generation 28nm chip technology to compete with Intel. IBM plans to introduce 28nm chips in second half of 2010.

IBM and partners will use high-k metal gate and low-power complementary metal oxide semiconductor process technology to manufacture 28nm chips. The 28nm process technology can result in 40 percent performance increase, 20 percent decrease in power requirement and 50 percent reduction in size of the chip.

IBM said in a statement, “These improvements enable microchip designs with outstanding performance, smaller feature sizes and low standby power, contributing to faster processing speed and longer battery life in next-generation mobile Internet devices and other systems.”

Two firms that will benefit a lot by these developments are ARM and AMD. As ARM will soon enter netbook market with Cortex processor lineup and AMD needs to step up its processor performance to compete in both laptop and desktop market.