IBM says it has built a computer chip whose smallest features are about seven nanometers wide, meaning it could provide about four times the capacity of today's chips. Basically, it packs far more transistors into the same space, and that means data can travel more quickly between those transistors.

The announcement, made on Thursday, was hailed as a breakthrough, evidence that semiconductors will continue to improve in the years to come. But Patrick Moorhead, an analyst who closely follows the chip business, had a slightly different reaction. "I believe Intel has done the same thing already," he says, referring to the world's largest chip maker. "They're just not telling people."

'A company other than Intel has come out with technology that supports the notion of Moore's Law.'

Indeed, Intel has shown a public roadmap indicating that it's working on a 7 nanometer chip. And it has more people working on chip improvements that anyone else on the planet. "They've been ahead on transistors for 15 or 20 years," Moorhead says. But after falling behind schedule on so many occasions, the company has grown more cautious about releasing its schedule to the public. (Intel declined to comment for this story.)

The real takeaway from Thursday's announcement is Intel may have more competition than previously thought. And that could be just as important as the ongoing health of Moore's Law, the notion that the number of transistors on a chip doubles every 18 months or so. "A company other than Intel has come out with technology that supports the notion of Moore's Law," Moorhead says. "You have to have someone other than Intel doing this stuff. It keep prices down. And it keeps investment in new technology going up."

Healthy Competition

Previously, it looked like IBM had stepped out of the chip game. Last year, it paid chipmaker Globalfoundries Inc. $1.5 billion to take some chip plants off its hands. But now, it seems that IBM will still contribute research to the wider market. Big Blue says it will license its new 7 nanometer manufacturing technology to GlobalFoundries as well as Samsung and other vendors.

SUNY College of Nanoscale Science and Engineering's Michael Liehr, left, and IBM's Bala Haranand look at wafer comprised of 7nm chips on Thursday, July 2, 2015, in a NFX clean room Albany. Several 7nm chips at SUNY Poly CNSE on Thursday in Albany. (Darryl Bautista/Feature Photo Service for IBM) Darryl Bautista/Feature Photo Service/IBM

This chip is unlikely to reach the market for several years. "The market still has to ingest 14 nanometers and 10 nanometers," Moorhead says. But in the end, it could mean more pressure on Intel.

Globalfoundries and Samsung and TSMC continue to churn out chips, and companies like AMD and so many others continue to design them. But ever since AMD's steep decline—and its spin-off of Globalfoundries—Intel has maintained a sizable lead when it comes to producing chips with raw computing power. As time goes on, that can hurt the market. But the good news is that Intel is facing increased competition on several other fronts.

It plays a distant second fiddle to ARM chips in the world of mobile devices. A new breed of low-power chip is providing an alternative inside internet data centers. And now IBM says it has reached 7 nanometers, at least on a test chip. Moore's Law continues. And, hopefully, so does a healthy market.