American Telephone & Telegraph Co. announced yesterday that it will begin manufacturing a silicon chip capable of storing more than 1 million bits of information, and may become the first company in the world to have them in production.
The company said the new "megabit" chip, developed by AT&T's Bell Laboratories in Allentown, Pa., will be produced in sample quantities within a year and will be in full production by 1986.
In the same thumbnail-sized strip of silicon, the megabit chip represents a fourfold leap in memory storage over the 256K chip, which can hold slightly more than a quarter of a million bits. (A "K" represents 1,024 bits of information.)
Computer memory chips -- called DRAMs for Dynamic Random Access Memory -- are a key component in personal computers, mainframe computers, defense technology and a variety of other computer-related electronics. These DRAM chips store the data that are manipulated by the computer's processing chips.
"This is an important announcement," said Lane Mason, a senior semiconductor analyst for Dataquest, a San Jose, Calif.-based computer industry market research firm. "We now have something like a domestic leader that can be a major megabit chip supplier."
Historically, Japanese firms have dominated the market for DRAM chips. According to Dataquest, the Japanese hold the lion's share of the 64K DRAM market, the largest category of memory chips. The Japanese are believed to have a 90 percent share of the roughly 40 million 256K chips that were sold worldwide this year.
They are expected to hold that share in 1985, when more than 250 million 256K chips should be sold. By contrast, nearly 900 million 64K chips are expected to be sold next year.
At a professional semiconductor conference in February, the Japanese firms of Hitachi, Fujitsu and Nippon Electric Corp. announced that they had made major strides in megabit-chip development. Later in the year, both Toshiba and IBM announced that they, too, had made progress on the million-bit chip.
AT&T, though, is the first company to state it would actually begin shipping the product as soon as 1985.
However, according to George J. Popovich, marketing manager for memory products at Intel, a major manufacturer of semiconductors, AT&T was an early leader in development of the 256K DRAM but chose to produce the chip for the company's internal use. Consequently, he said, "I wouldn't see this as having a major impact on anybody's production schedules at large."
Analysts point out that the semiconductor industry is now retrenching in the wake of excess capacity. Texas Instruments and other chip companies have announced major layoffs and sliding earnings. However, most analysts view the lull as an "inventory correction," said Popovich, and see a huge potential market for the megabit chip.
AT&T officials could not be reached for comment.