IBM will invest $3bn over the next five years on research into the future of semiconductor technology to meet the demands of cloud computing and Big Data.
The first of two broad research programmes is aimed at the so-called '7-nanometre and beyond' silicon technology that will address physical challenges threatening current semiconductor scaling techniques, which will impede the ability to manufacture chips.
The second is focused on developing post-silicon era chips using alternative materials, such as graphene, and new approaches to manufacturing to overcome the physical limitations of silicon-based semiconductors.
In particular, IBM will be investing significantly in emerging areas of research such as carbon nanoelectronics, new memory technologies, architectures that support quantum and cognitive computing and silicon photonics - which takes advantage of pulses of light for communication rather than traditional copper wiring.
The move has been prompted by the convergence of physical scaling limits in underlying chip technology and the rise of cloud and big data applications, which are placing tough new requirements on bandwidth, memory, high-speed communication and device power consumption.
"In the next ten years computing hardware systems will be fundamentally different as our scientists and engineers push the limits of semiconductor innovations to explore the post-silicon future," said Tom Rosamilia, senior vice president at IBM Systems and Technology Group.
"IBM research and development teams are creating breakthrough innovations that will fuel the next era of computing systems."
IBM researchers and other semiconductor experts predict that while challenging, semiconductors show promise to scale from today's 22nm down to 14 and then 10nm in the next several years.
However, scaling to 7nm, and perhaps below, by the end of the decade will require significant investment and innovation in semiconductor architectures as well as invention of new tools and techniques for manufacturing.
"The question is not if we will introduce 7-nanometre technology into manufacturing but rather how, when and at what cost?" said John Kelly, senior vice president at IBM Research.
"IBM engineers and scientists, along with our partners, are well suited for this challenge and are already working on the materials science and device engineering required to meet the demands of the emerging system requirements for cloud, big data and cognitive systems. This new investment will ensure that we produce the necessary innovations to meet these challenges."
But the company is also looking towards a post-silicon era, where the increasingly small dimensions of silicon transistors will prevent any gains in performance due to the nature of silicon and the laws of physics.
Beyond 7nm, the challenges dramatically increase, requiring a new kind of material to power systems of the future. Potential alternatives include new materials such as carbon nanotubes and graphene or non-traditional computational approaches such as quantum computing, silicon photonics, machine learning techniques and next-generation low-power transistors.