Newspapers report that IBM’s Model 3090 mainframe has become the first commercial computer to use a megabit memory chip, 4 times the storage capacity of the then current generation of 256 kilobit chips. To give context to that amount of storage, it was reported that a megabit chip could store over 1 million bits of data, which translated to about about 100 double-spaced typewritten pages. At the time most personal computers were still using 64 kilobit memory chips.
IBM wanted to make the announcement for two big reasons. First, the use of higher density memory could allow them to make their mainframe computers smaller, which would save their customers cost in floor space. But perhaps more importantly, they wanted to show that American technology companies in general and IBM in specific could keep up with Japanese companies in the highly competitive semiconductor market of the time. Lower-cost Japanese firms had captured 85% of the DRAM market and Fujitsu, Hitachi, Mitsubishi, NEC, and Toshiba were set to begin shipping megabit memory of their own. IBM was attempting to shed their reputation as being slow and stodgy as compared to the upstart Japanese. They even made promotional buttons with actual 1 megabit chips!