NEW YORK (AP) -- Future microprocessors from IBM Corp. will optimize their performance by altering themselves, adding memory or removing unneeded bits of circuitry on the fly, the company's chief technologist said Wednesday.

The self-morphing chips, still in development, were disclosed as IBM revealed wide-ranging plans for the company's current generation of chips, the Power5.

Big Blue hopes to work with outside technology developers to make Power chips a flexible, widely used driver of several kinds of computing systems, from high-end corporate servers to video game consoles and handheld devices.

For decades, microprocessors have gotten ever faster by cramming more and more transistors onboard, but the physical limitations of the materials involved is making it harder to shrink the dimensions much further.

Instead of relying on continual improvements in chip speed, future chips must be more cleverly designed to combine more computing functions, said Bernard Meyerson, IBM's chief technologist. The self-altering chip is one means of achieving that.

Here's how it would work. Continually running electrical current through a tiny circuit can cause its materials to erode, as individual atoms get stripped and dragged away by the electricity. Eventually the metal breaks.

Chip designers got around the problem by carefully choosing a blend of metals. Now, Meyerson said, IBM has developed a way to make the metal erosion happen at will--when software running the chip determines that part of the circuitry needs cutting or tuning.

"It's a bit frightening to the typical designer," Meyerson said.

He said early versions of the self-changing chips have been tested at IBM, which, like other computing companies, is pursuing means of making systems "autonomic," or self-healing and self-regulating. Meyerson said fully realized versions of the morphing chips would emerge in the next decade.

Of course, IBM has high expectations for its chip business right now. The division has struggled with soft demand and lost money, though executives have pledged it will be profitable in 2004. The technology group, which includes chips, was recently merged with the systems unit to accentuate their shared aims.

One goal announced Wednesday is for Power's underlying architecture to be customized by developers of other systems, much as the open-source Linux operating system can be configured by its users. For example, a Chinese company, CultureCom Holdings Ltd., has tinkered with Power chips to get them to understand Chinese characters, removing the need for translation software.

Some analysts said IBM seemed to be making a more forceful attempt to compete against leading chip maker Intel Corp.

But IBM executives played down that suggestion, saying IBM would continue to sell servers with Intel chips because the market is big enough for both kinds of systems.