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Researchers have shown off a transistor made from just seven atoms that could be used to create smaller, more powerful computers.

Transistors are tiny switches used as the building blocks of silicon chips.

If the new atomic transistor can be made in large numbers it could mean chips with components up to 100 times smaller than on existing processors.

The Australian creators of the transistor hope it is also a step towards a solid-state quantum computer.

The transistor is not the smallest ever created as two research groups have previously managed to produce working single-atom transistors.

However, the device is many times smaller than the components found in chips in contemporary computers. On chips where components are 22 nanometres in size, transistor gates are about 42 atoms across.

The working transistor was created by replacing seven atoms in a silicon crystal with phosphorus atoms.

"Now we have just demonstrated the world's first electronic device in silicon systematically created on the scale of individual atoms," said Professor Michelle Simmons, lead researcher on the project at the University of New South Wales.

Moore's Law predicts that the amount of memory that can fit on a given area of silicon, for a fixed cost doubles every 12-18 months. The limit of this prediction is being tested as components get ever smaller and their computationally useful properties become less reliable.

If an entire chip could be made with every one of its billions of transistors made from the silicon crystals, it could mean an "exponential" leap in processing power, said Professor Simmons.

The researchers are a long way from a commercial process because the tiny transistor they created was handmade. The team used a scanning tunnelling microscope to move the phosphorus atoms into place.

The work on the tiny transistor is being carried out as part of a larger project to create a quantum computer.

The research team revealed their results in the journal Nature Nanotechnology.