By Caroline Humer

NEW YORK (Reuters) - International Business Machines Corp. said on Monday it has built the world's fastest microchip, which will enable communications systems to run far more quickly.

Audio/Video Payne's Picks: We Need a Miracle to Get Us Out of This Rut - (Yahoo! Finance Vision) Stock Spotlight: Nvidia's glow hasn't faded, at least for analysts - (ON24)

The integrated circuit runs at more than 110 GigaHertz, or 110 billion cycles per second, meaning it will be able to process more than 2.8 million pages of text per second.

The chip that previously held the record for speed, also from IBM, can run at up to 80 GigaHertz, with a more typical speed of 50 GigaHertz to 60 GigaHertz, the Armonk, New York, company said.

The new chip will be used in data communications equipment like switches and routers that are used in optical communication networks, IBM said. Such equipment is sold by companies like networking giant Cisco Systems Inc. .

Besides connecting computers, telephones and other electronic devices in optical networks, the chips could be used in other high-performance settings, such as military applications.

Like its 80 GigaHertz predecessor, the new integrated circuit is based on silicon germanium chip-making technology. Frank Dzubeck, president of consulting group Communications Network Architects, said the new chip is significant because it shows that IBM can move advances in silicon germanium from the research lab into development.

Most chips, such as the microprocessors that are the brains of computers, are made out of silicon, a base material that acts as a semiconductor. Silicon germanium also includes layers of germanium, a substance that is like silicon but which makes a transistor that can switch faster and perform better.

"Reality is 110 GigaHertz," Dzubeck said.

"Silicon germanium can be extended much further," but with this announcement, IBM is sending a message that "this is deliverable as we speak," he added.

Some IBM competitors are also working on developing faster microchips based on silicon germanium technology. Conexant Systems Inc. , a small chip company based in Newport Beach, California, said at a December conference that it is working on a circuit that runs at 200 GigaHertz.

IBM said the discovery (news - web sites) indicates that silicon germanium is outperforming other technologies as researchers develop smaller, faster chips.

It also said silicon germanium works at high frequencies while consuming less power than its competitors.

The push toward ever-faster chips is described in Moore's Law, created by Intel Corp. co-founder Gordon Moore, which says that the number of transistors on a chip doubles every 18 months.

IBM said it expects its 110 GigaHertz chip to be available by the end of the year. It unveiled details at the Gorham Compound Semiconductor Outlook Conference in San Mateo, California on Monday.

News Resources Message Boards: Post/Read Msgs (44 msg Feb 25, 8:18 PM ET) My Yahoo!: Add Technology - Internet Report to My Yahoo! News Alerts: job cut employee | discovery More Alerts: News Bulletins, News, Mobile, Stocks