The chip, known as the z196, is used to power the zEnterprise, the most powerful and energy efficiency mainframe computer that IBM unveiled in July.

IBM also said that it spent more than $1.5 billion on research and development of the new chip technology, which debuts in the form of the 5.2-GHz z196 CPU. The new processor has 1.4 billion transistors on a 512-square-millimeter surface. Nearly 5,000 employees worked on the project.

IBM plans to ship new the processors in a new zEnterprise 196, which contains 96 of the world's fastest chips and can execute more than 50 billion instructions a second, more than 17,000 times the rate of IBM's high-end system in 1970, the company said.

It was the demand from businesses that manage huge workloads, such as banks and retailers, led to the development of the new microprocessor, according to IBM.

The chip is designed to perform well not only on traditional mainframe actions, such as transactions against databases, but on computation-focused tasks, such as analyzing financial transactions for patterns that might point to fraud, Times Herald quoted Charles Webb, an IBM Fellow in Poughkeepsie, as saying.

The new system has 60 per cent more capacity than its predecessor, the System z10, and uses about the same amount of electricity.