IBM protects passwords with PC chip

New desktops will contain a chip designed to stop hackers, an approach said to be safer than relying on software.

IBM plans to start shipping its PCs with a new chip designed to thwart hackers by safeguarding passwords and other sensitive identity information.

Big Blue will be the first computer maker to use National Semiconductor's SafeKeeper Trusted I/O Device, which stores a computer's identity in silicon, making it harder for outsiders to access, the companies announced Thursday. It's adding the technology as part of an upgraded input-output chip, which is a secondary PC chip that shuttles data from various parts of a PC.

"Security, encryption and password management are key components of IBM ThinkVantage Technologies, which simplify the PC user experience and reduce management costs for organizations of all sizes," Clain Anderson, program director in IBM's PC division, said in a statement.

National Semi said that storing such information in hardware makes it inherently more secure than software-based approaches. The chip encrypts information using a code key only accessible to a specialized processor, protecting the information from outside hackers and user error and essentially locking it to the PC.

Such technology, commonly referred to as trusted computing, are part of an ongoing effort to better secure systems and protect digital information. Companies throughout the technology world have been working on a variety of methods to improve the reliability of authentication, including biometric approaches such as fingerprint readers and iris scanners. Microsoft, for example, last week introduced a keyboard that includes a fingerprint reader.

Some digital rights activists believe that the technology could stop the free flow of information among digital citizens.

The desktop chips cost about $5 in volume and are available now, National Semi said. A notebook processor, which costs $7 in 1,000-unit volumes, is expected to be available next quarter, the chipmaker said.

The security chip, used in IBM desktop computers that are shipping today, is now standard on almost every IBM PC instead of a special feature, National Semi spokeswoman Gayle Bullock said. The chipmaker also has a version for laptop computers, but she declined to comment on when it might be used.

IBM worked with National Semi to develop the chip, which replaces a dual-chip approach Big Blue previously used. Another National Semi representative, Jeff Weir, said Hewlett-Packard and Dell are expected to add the technology, meaning that they also could become customers for the company's security chip.

CNET's Stephen Shankland and Rob Lemos contributed to this report.