It is projected to achieve 45 per cent higher performance, or 75 per cent lower energy use, than today's most advanced 7 nm node chips.
The company's new 2 nm chip technology helps advance the state-of-the-art in the semiconductor industry, addressing this growing demand.
"The IBM innovation reflected in this new 2 nm chip is essential to the entire semiconductor and IT industry," Dario Gil, SVP and Director of IBM Research, said in a statement.
"It is the product of IBM's approach of taking on hard tech challenges and a demonstration of how breakthroughs can result from sustained investments and a collaborative R&D ecosystem approach," Gil added.
The potential benefits of these advanced 2 nm chips could include quadrupling cell phone battery life, only requiring users to charge their devices every four days, and slashing the carbon footprint of data centres, which account for one percent of global energy use, etc.
The 2 nm design demonstrates the advanced scaling of semiconductors using IBM's nanosheet technology. Its architecture is an industry first, the company said.
Developed less than four years after IBM announced its milestone 5 nm design, this latest breakthrough will allow the 2 nm chip to fit up to 50 billion transistors on a chip the size of a fingernail, it added.