By THE ASSOCIATED PRESS -- Solving a problem that has perplexed the semiconductor industry for 15 years, Intel Corp. researchers say they've determined how to reduce the leaks of electrical current that spring from squeezing a greater number of smaller transistors onto silicon chips. That miniaturization has not only driven greater computer performance for more than 30 years but revolutionized the world's economy. Recently, it's become clear that the basic building blocks were quickly reaching the physical limits of their size. In effect, the millions of minuscule switches that make up silicon chips leak electricity when they're supposed to be shut off. To compensate, engineers have increased the current, driving up power consumption, decreasing battery life for portable devices and generating more heat. Intel researchers reported Wednesday that they have built transistors that not only leak less but also show record-setting performance, said Sunlin Chou, senior vice president and general manager of Intel's Technology and Manufacturing Group. "This allows us to continue the historical rates of progress. Otherwise, progress would slow down or even stop,'' he said. "We won't have the kind of progress that will make more computing and communications available with higher performance, lower power and lower cost.'' All major semiconductor companies have been scrambling to find the right combinations of materials. It's the "holy grail'' of the industry, said Dan Hutcheson, chief executive and analyst at VLSI Research. "It's a major breakthrough to make it work,'' he said. "If you look at the transistor characteristics that they're showing, it clearly works.'' Intel's solution is to change two transistor components, including one material that's been used for more than 30 years. The first is called the gate dielectric, or insulator; the other is the gate electrode over which current flows. Leakage occurs when current continues to flow even when the switch is off. Engineers determined that the problem stems from a material called silicon dioxide, which acts as an insulator on the points where the current flows into and out of a transistor. In current chips, it's five molecules thick. With one new material -- known as a "high k dielectric'' for its ability to hold a charge -- leakage is greatly reduced. In Intel's tests, the material -- whose composition the company would not reveal -- is thicker than silicon dioxide, but engineers say it will be shrunk. Other companies have tried various combinations of leak-reducing materials, but they showed negative side effects -- namely, they made transistors slower or require more voltage, said Ken David, Intel's director of components research. Intel also replaced the gate electrode, which for years has been a form of silicon, with a different metal. The company did not immediately identify the metal. Company officials claim the new processes won't increase chip prices. Further testing on reliability and yields is required, but Intel expects the new materials to be an option for production by 2007. At that time, Intel expects to sell chips with a billion transistors. By comparison, today's flagship Pentium 4 has about 55 million transistors. "It looks like they solved at least some, if not most, of the problems,'' said Jack Lee, a professor of electrical and computer engineering at the University of Texas. "Will these materials have a sufficient amount of reliability ... is still a big question.'' If further testing reveals no major issues, Intel will be able to continue the pace predicted by its co-founder Gordon Moore in a 1965 observation now known as Moore's Law. Moore predicted that the number of transistors on a silicon chip would double every couple of years. "The most significant thing is that this shows you can get away from the good old silicon dioxide,'' Chou said. "Once you've demonstrated you can make a change, the thought of yet another change somehow doesn't seem nearly as intimidating as if you can't even demonstrate the first change.''