IBM and a key Taiwanese research group have agreed to further develop racetrack memory chips and to find more product areas for Cell processors.

Racetrack memory chips are a new technology developed by IBM to replace today's hard disk drives (HDDs) and NAND flash memory to store songs, photos and other data in products ranging from iPods and iPhones to PCs.

A joint development team led by Stuart Parkin of IBM, who came up with the idea for racetrack memory, and the vice president of Taiwan's Industrial Technology Research Institute (ITRI), Ian Chan, will study new materials and structures that can be used to further develop the memory chips.

IBM's desire to work with the Taiwanese group shows how serious the company is about developing and selling products related to racetrack memory and Cell technology. Taiwanese companies are responsible for the design and manufacture of much of the world's IT hardware, including for companies such as HP and Dell.

Working with ITRI will help improve the chances racetrack memory chips and Cell processors will be used in new products designed in Taiwan.

IBM has long been lauded for its research efforts but some analysts have criticised the company for not always being able to turn costly research into profitable products. Chip development is especially tricky. Companies often develop powerful chips that ultimately end up in the IT graveyard because nobody can figure out a cost-effective way to mass-produce them.

"Finding cost efficient ways to manufacture IT products is one of Taiwan's strengths," said Lee Chih-kung, executive vice president of ITRI.

ITRI is a publicly funded Taiwanese research centre that has a long history of working with Taiwan's IT industry, including developing new industries.

The founder and chairman of Taiwan Semiconductor Manufacturing (TSMC), Morris Chang, formerly ran ITRI and even started his company on ITRI's grounds.

As part of the development effort around racetrack, researchers from IBM will travel to Taiwan a few times each year, officials said. At least one ITRI researcher will spend three years at IBM in the US working on related projects.

IBM has said it may take up to four years to develop working racetrack memory chips that can be commercially manufactured.

The company says racetrack memory runs faster than current storage memory, costs less, uses less power, gives off less heat, can store 100 times more data, and won't wear out no matter how many times data is erased and rewritten. One weakness of NAND flash, for example, is that some varieties can only be written on 10,000 times.

IBM's development work with Sony and Toshiba on the Cell Broadband Engine, a processing chip with nine independent cores on board that was originally developed for the PlayStation 3 (PS3), is an example of collaborative success for the US giant.

ITRI plans to open a Cell product development centre at its campus in Hsinchu, the Silicon Valley of Taiwan, so companies from around the island can find ways to use the technology in new products.