An item in today’s Investors Business Daily (investors.com) reports that at a gathering in San Francisco yesterday, Intel Corp. (ticker INTC) showed off what it called the most radical shift in semiconductor technology in more than fifty years, introducing a new 3-D transistor design that aims to let the company keep pace with Moore’s Law and help it compete with ARM Holdings (ARMH) in low-power chips for smartphones and tablets. Intel called the development of its 3-D transistor design known as Tri-Gate “a significant breakthrough in the evolution of the transistor, the microscopic building block of modern electronics.”

“The gains that these transistors provide really are unprecedented,” said Bill Holt, senior vice president and general manager of Intel’s technology manufacturing group. “We’re going to be able to provide better performance and lower power at the same time. These benefits will extend across the entire range of our product line.” The Tri-Gate transistors will provide up to 37% better performance at low voltage vs. Intel’s current 32-nanometer planar transistors, says the company. Nanometers refers to the ever-thinning width of the circuitry etching on chips. Also, the new chips consume less than half the power at the same performance as current Intel chips, it says. The company says the chips should start showing up in servers, PCs and mobile devices in 2012.

The 3-D chips will help Intel close the gap with ARM, whose chip designs dominate the mobile device market, says Craig Ellis, an analyst with Caris & Co. Intel will be “a heck of a lot more competitive,” he said. The new 3-D chips will help Intel continue to do well in notebook PCs, where performance is prized, and push into smartphones and tablets, where power savings is key, Ellis says. The technological advance and advantages Intel enjoys in process and manufacturing technologies should provide Intel with a significant first mover advantage in this space.

Intel’s stock price has enjoyed a significant advance recently and is currently trading at $23.38, near a 52 week high and hardly affected by the recent selling in the overall market. ARMH, whose stock price has had quite a run, nearly tripling in the past 12 months, currently trades off its’ 52 week high at $28.47