Researchers at IBM have discovered a way of getting more out of the current method used to make computer chips.
The method allows more circuits to be "printed" on a chip
They say they have been able to etch circuits on silicon wafers that are a third of the width of those produced using existing technology.
The technique could lead to smaller and higher capacity chips, and delay a switch to costlier and unproven chip-making methods.
Current technology is reaching its physical limits as chips become tinier.
The semiconductor industry has been looking for ways of etching more circuits on silicon wafers to meet the demand for faster and ever more powerful chips.
IBM said the new production technique could extend "Moore's Law", a guiding principle of the technology sector for the last 40 years.
Handheld devices have been getting more and more powerful
Intel founder Gordon Moore predicted in the late 1960s that the number of transistors on a chip, and therefore its processing power, would double every 18 months.
The methods used by the scientists at IBM's Almaden Research Center in San Jose, California, uses a method called deep-ultraviolet optical lithography.
This is essentially the method used to etch circuits on chips. The IBM team said they were able to "print" circuits that are 29.9 nanometres wide.
This is about one-third of the width of the smallest computer circuits in mass production today. One nanometre is a billionth of a metre.
"Our goal is to push optical lithography as far as we can so the industry does not have to move to any expensive alternatives until absolutely necessary," said Dr Robert D Allen, manager of lithography materials at IBM's Almaden Research Center.
"This result is the strongest evidence to date that the industry may have at least seven years of breathing room before any radical changes in chip-making techniques would be needed."
IBM said the method could help fuel the push towards more powerful and compact handheld devices.