Today's flash memory chips store as many as 32 billion bits on a single chip. It's an impressive achievement, but manufacturers only have a few more years of squeezing those components into ever-smaller configurations before the whole process becomes either too expensive or physically impossible. That's why today's news from IBM (NYSE:IBM), Macronix (NASDAQ:MXIC), and Qimonda (NYSE:QI), announcing the creation of a new "phase-change" material that could lead to the development of more powerful memory chips, is a big deal.

The new material is a germanium-antimony alloy measuring three nanometers by 20 nanometers in size. The material's unique properties and tiny size mean that it needs only half the amount of electricity currently used to power flash memory. Moreover, because these chunks of alloy are so minute, they can be switched back and forth between their different states (a characteristic that allows them to represent either zero or one, and thus be read as bits of data) at speeds 500 times faster than traditional flash-memory technology.

Samsung, and a partnership between Intel (NASDAQ:INTC) and STMicroelectronics (NYSE:STM), are also developing similar technology. But the IBM breakthrough is believed to be more significant, because the performance advantages of the germanium-antimony far exceed those of the other firms' materials.

The only question remaining is whether the technology is scalable. While these companies can manufacture the chips in large quantities, can they do so cheaply enough to be competitive with existing technology? Based on the remarks of experts who have read the detailed research paper, the prospects appear good.

According to an article in today's New York Times, one professor believed the technology was scaleable, while an engineering consultant said the technology was so good that it "could change the basic equation between processors, local storage and communications."

Therein lies the real opportunity for IBM. It's no longer in the memory business, but because memory is a $19 billion market, it's possible that Big Blue could get back in. The greater possibility is that it will focus on using the new memory technology to bolster the performance characteristics of its own microprocessors.

For example, non-volatile memory could help IBM to manufacture computers that boot up instantly, or new chips that could expand and improve the performance and capabilities of digital music players, cell phones, and other electronic devices.

Either way, by stretching memory technology to new levels, IBM is ensuring that it won't be forgotten by Wall Street anytime soon.

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Fool contributor Jack Uldrich owns stock in IBM. Intel is a Motley Fool Inside Value pick. The Fool has a strict disclosure policy.