An NEC spokesman confirmed earlier reports the design is 1/18th the size of current transistors. It has a gate with a width of only 5 nanometers. A nanometer is a billionth of a meter.

A typical semiconductor chip will be able to hold 40 billion of the NEC transistors inside a chip measuring one square centimeter, more than 150 times current capacity, reported Reuters, a news wire agency.

Transistors are electronic circuits that make up most semiconductors, a global market worth US$115 billion in 2002.

However, given that NEC said the transistor has a possible market launch set in 2020, revenue is likely to be some way off. John Yang, a Standard & Poor's analyst told Bloomberg, a business news wire, that the challenge for NEC was not technological development but creating a business model and marketing the transistor effectively. He said Japanese companies were not good at translating R&D successes into commercial products.