The Biggest Tech Breakthrough in 50 Years

There are somewhere between two and three billion computers in the world right now.

And every last one is about to become obsolete.

Sorry, but yes, that goes for the computer you're using to read this.

It's a fundamental redesign of computing power that has been 50 years in the making.

You could probably manage to hang on to your current computer for a year or two, if you're patient.

But once your friends and neighbors start showing off the incredible speed and power of their new gadgets, or it turns out that incredible new software you've been eyeing won't run on your current computer, well, it's only a matter of time until you'll sign up this game-changing upgrade.

And consumer upgrades are just the beginning.

I predict this key breakthrough technology will soon have a dramatic impact on everything from artificial intelligence and robotics to medical research to aerospace to gaming and beyond.

It's very rare that a new technology truly represents a "sea change" across so many industries and applications. The last one of this enormity was the advent of the transistor in the late 1950s - the basis of modern electronics and undoubtedly the greatest invention of the 20th century.

And when this next breakthrough makes its debut on April 29, 2012, I believe it will deliver a bonanza payday for two very savvy companies and their investors.

High Tech is About to Enter a Whole New DimensionWe're still waiting for atomic computing - computing technology in which devices are made up of just a few molecules - to enter the realm of possibility. But that's likely a decade or more off.

In the meantime, 3D computing is the breakthrough that will dominate the next decade, taking computing to a level almost unimaginable.

Now, you may already know that America's high-tech economy depends on devices - called microprocessors - that are about the size and shape of postage stamps. Ever since their invention, these chips have fueled huge growth in computing as electronics have gotten ever smaller.

Let me explain the importance of small scale.

It's thanks to the steadily shrinking size of these chips that your smart phone today packs more punch than the huge computers NASA had when it put Neil Armstrong on the moon. If they hadn't gotten smaller, cell phones would still be the size of bricks. And you could forget about having wireless Internet, built-in video cameras, or music players in your phone.

As it turns out, there's a principle that explains - or really predicts - this continued exponential growth in semiconductor speed and power.

It's called Moore's Law. A Silicon Valley legend, Gordon Moore predicted that processing power would double roughly every two years.

That doubling has come as engineers kept finding new ways to put more transistors on a single chip. Transistors are the tiny gizmos that move and store data. Today, semiconductors now boast more than one billion transistors - ones so small you can't see them without a microscope.

And therein lies the problem. Chip makers are simply running out of real estate.

Right now the physical limit of integrated circuits stems from their basic design. Since they're flat, they only work in two dimensions. And that's been standing in the way of Moore's prediction.

But what if you could stack transistors on top of each other? You would greatly increase computing capacity. Think of it this way. A file cabinet holds a lot more information than a single sheet of paper.

As basic as that sounds, engineers have only just now figured out to go 3D and add "drawers" filled with transistors.

And one company is debuting its new chips this summer.

My Short-Term 3D Computing PlayIntel Corp. (NASDAQ: INTC) is synonymous with the computer revolution. How fitting then that the company is making what I believe is the biggest chip design breakthrough in 50 years.

You see, Intel just added "fins," or "pillars," that rise above a chip's flat surface. These fins allow data to move vertically as well as horizontally. Multiple fins crisscross the surface like a grid, boosting performance by 37% right out of the gate.

Not only that, but Intel's new 3D chips use half as much power, too. This is significant for two reasons.

• First is straight-up marketing. Environmentalists want computer firms to design systems that use less power in a bid to save the planet.

• More importantly, however, is the potential for new sales. In the past, Intel pushed speed over low-power chips. That's why it excels in desktops and laptops - where speed is crucial. But it's an also-ran in mobile phones, where makers are more concerned with heat and battery life. So, the new design will help grab sales in the mobile market. And it will push the rest of the chip industry to go 3D.

In electronics, of course, small is beautiful. How small? These days, computing is all about the nanometer. A nanometer is just another unit of measurement, like a foot or an inch. But we're talking very small units, indeed.

A human hair is roughly 100,000 nanometers wide. The circuits in Intel's Tri-Gate chips measure just 22 nanometers across. Per Intel, that means more than six million of its transistors could be crammed into the period at the end of this sentence.

Yet in just five years, those circuits will be less than half that size.

Intel intends to use its "Tri-Gate" technology across its product lines. That covers the range from mobile-phone chips to those used in computer servers that power the Internet and the cloud. And what's more, by stacking transistors on top of each other, Intel will get continued increases in processing as its slims the chips down even further.

No less a luminary than Gordon Moore himself has weighed in on Intel's new design.

"For years we have seen limits to how small transistors can get," Moore said in a statement to the media. "This change in the basic structure is a truly revolutionary approach."

At this point, Intel is the clear leader of the pack in the 3D computing industry.

Intel microprocessors using Tri-Gate technology entered into mass production in the fall of 2011. Yet they will only begin making their way into the first round of laptop and desktops starting April 29, and rolling out over the summer, according to the latest reports from CPU World. From there, I expect 3D computing to explode on the scene.

If you want a short-term play, buy Intel. It's had a nice rebound since 2009 lows, but I expect that, as the first (and, so far, only) company to come out with 3D processing products this year, the stock is certain to forge ahead. It'll pay you a nice dividend, currently at 3.0% annualized, while you wait.

Of course, the other players have no intention of letting Intel dominate the market.

My Long-Term 3D Computing PlayNobody thinks of this company as a growth play. Besides being one of the largest publicly traded tech firms in the world, it's a century old.

But when it comes to 3D computing, it is about to spark a revolution.

Indeed, while Intel may be the first out of the gate with 3D chips, I believe International Business Machines Corp. (NYSE:IBM) will perfect them.

Right now IBM is working on a unique way of "stacking" up to 100 chips on top of each other. The company says the process will lead to electronic devices that run 1,000 times faster than what current technology allows.

Big Blue had succeeded in stacking chips several times in the past. There was just one problem - they didn't have the right type of glue that would allow them to scale up for production.

So, IBM forged a partnership with another tech giant, 3M Co. (NYSE:MMM), which has deep expertise in special material and adhesives. Working together, the two believe they can mass produce what amounts to computer towers on a single chip.

They say that in the very near future the technology will transform the capabilities of mobile phones, computers, gaming devices, and more.

Yet if the team only manages to hit 10% of its goal, the result will be a dramatic impact across the board. (Even 10 chips stacked vertically would create a powerful new wave of technology.)

You may balk at owning a stock that is priced over $200 a share. But I seem to remember people balking at buying Google when it was at the same price... and it has since tripled.

IBM could be the stock of the decade.

One final note about IBM...

For decades, legendary investor Warren Buffett carefully avoided tech stocks at all costs, saying they were too exotic to understand.

But it seems recently the Oracle of Omaha discovered a profound truth: If you aren't invested in today's high-tech sector, you're leaving money on the table. A lot of it. Just a few months ago, in November 2011, Buffett plowed into the sector with a $10.7 billion investment in IBM, making a massive bet on high-tech.

Of course, we can't be sure that IBM's 3D advances are what made Buffett finally sit up and take notice... but it's clear they didn't scare him off.

This Ushers in a New Era of Moore's LawI wrote this report on 3D computing because I believe it symbolizes the Era of Radical Change.

It all goes back to Moore's Law.

Computing power has doubled more than 25 times in the past 50 years. With 3D computing, those exponential increases will be able to keep up with Moore's Law. With Tri-Gate transistors, Intel claims to have extended Moore's at least another two years.

And after that? Well, I'll let you know.

Whatever happens, it's clear that the years ahead will be like nothing we've seen before... and take the entire high-tech ecosystem to a whole new level.

Consider this...

Because of 3D computing, just one technological advance I'm tracking - one among many - the very near future is going to look a whole lot different.

Imagine one U.S. soldier able to control dozens of drones and robots at the same time from a device no bigger than a smart phone... An autonomous vehicle driving itself down a safe, high-tech highway... Some of your "coworkers" will be robots much "smarter" than humans... You'll have the ability to download a video library in a matter of seconds and store it on a flash drive the size of your pinkie finger... and doctors will augment your IQ with chips implanted in your brain that will give you the intelligence of 10 Albert Einsteins.

Personally, I just love this stuff. And if it grabs your attention the way it does mine, stay tuned.

I'll have a lot more for you in the coming weeks about these profitable trends that make up this Era of Radical Change.

Here's a sample of the exciting tech on my investment radar screen:

• A new see-through computer screen that converts files into 3D images you can move with your hands.

• Solar panels constructed as mini-towers that deliver 20 times more power than conventional arrays.

• The microdevice that amounts to putting a human stomach on a chip.
• The device is actually lined with cells from the intestine and is designed to go inside the body to detect disease.

• Making a robotic spy "plane" the size of a hummingbird that flies like the real thing. The Pentagon paid a publicly traded, small-cap firm to develop what I predict will be the next generation of drone technology.

• Researchers are designing highways that act as charging stations to juice up electric vehicles - while the cars are still racing down the road.

• The trip from New York to Beijing could take just two hours, thanks to a novel transport tube that looks like something out of science fiction. Passenger capsules would float inside the tube, powered by exotic superconductors, and zoom people around the globe at speeds of up to 4,000 mph.

• Carbon nanotubes that can make objects appear invisible. In a project funded by the Pentagon, scientists found that bending light in certain ways created the "mirage" that objects weren't really there.

Other Avenues to Profit Currently, Intel and the IBM team have the design "edge" in the 3D computing world. But I have uncovered seven other companies that are quickly developing their own ways to play this new technology. Take a look:

• Applied Materials Inc. (NasdaqGS:AMAT) is collaborating with the Institute of Microelectronics in Singapore on 3D chip packaging. The two recently spent $100 million building the most advanced research facility of its kind. With 3D chip packaging, multiple chips can be stacked on top of each other and connected with wires that run vertically through the stack.

• Hewlett-Packard Co. (NYSE:HPQ): Under a new project code named "Corona," HP aims to create stackable 3D chips that communicate using built-in microscopic lasers, according to the online journal Endgadget. Currently targeted for release in 2015, this product would constitute a form of optical communications with blazing speeds, with the added benefit of reducing power consumption by as much as 80%.

• Altera Corp. (NasdaqGS:ALTR) and Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM): As a contract chipmaker, Taiwan Semi recent said it has a new technology for making 3D chips. The company said chip firm Altera is the first to complete a key test of the new chip. Taiwan Semi doesn't expect much 3D revenue until after 2015.

• Samsung Electronics Ltd. (OTC:SSNLF.PK): It's more well known for its TV sets, but Samsung recently began shipping a 3D memory module. These aren't processors that serve as PC "brains," but are vital for doing calculations and running programs.

• United Microelectronics Corp. (NYSE:UMC) had invested heavily in a breakthrough process with Japanese company Elpida Memory Inc. Where that partnership now stands remains uncertain, after Elipda's recent bankruptcy filing - unrelated to 3D chip technology. But I expect UMC to forge ahead, especially now that the industry is embracing the technology.

• Hynix Semiconductor Inc. (OTC:HXSCL.PK): A leading supplier of computer memory chips, it also is bidding on the assets of Elpida. Last year, this leading memory-chip maker joined a key industry research group investing in next-generation 3d computing technology.

Remember, we're still in the early stages of this revolution. I do expect to see more opportunities emerging that represent a more "pure play" on this technology. And, of course, as soon as I spot them, I'll let you know. So, I hope you'll check back with me often.

Nine 3D Computing Stocks at a Glance

Co.	Ticker	Mkt Cap	P/E	�� Cash���	�Debt	�Div%
Altera�	ALTR	12.6B	16.7	��� 3.4B	�.5B	0.8
Applied Mat.�	AMAT	16.1B	10.75	��� 2.0B	�1.95B	2.6
HP	HPQ	47.4B	8.4	��� 8.1B	�31B	2
Hynix	HXSCL	13.7B	�N/A	��� 1.7B	�6B	N/A
IBM	IBM	242B	16	��� 12B	�155B�	1.4
Intel	INTC	142B	12	�� 14.8B���	�7.4B	2.9
Samsung�	SSNLF	142B	N/A	���� N/A	�N/A	N/A
Taiwan Semi	TSM	� 80B	17.6	��� 5.1B	�1.7B	3.4
United Micro	UMC	6.2B	18.2	��� 1.8B	�1.3B	7.9