Australian scientists have unveiled the world's smallest electronic switch measuring just a few atoms, which will shrink microchips and revolutionise computing speeds.

The seven-atom transistor, measuring four-billionths of a metre and embedded in a single silicone crystal, is the first step in a "quantum computer" which will make calculations millions of times faster than existing devices.

Lead researcher Michelle Simmons said the technology has major implications for code-breaking, financial transactions and weather forecasting, which involve testing enormous numbers of possible scenarios.

"You'll be able to solve problems that would take longer than the life of the universe with a classical computer," she told AFP.

The University of New South Wales' Centre for Quantum Computer Technology (CQCT) and the University of Wisconsin-Madison created the transistor by manipulating atoms using a special microscope.

The breakthrough promises to reduce the size of microchips, which contain billions of transistors, by up to 100 times, simultaneously accelerating processing speeds "exponentially."

"Australia's first computer was commissioned in 1949. It took up an entire room and you could hold its components in your hands," Simmons said.

"Today you can carry a computer around in your hand and many of its components are more than 1000 times smaller than the width of a human hair.

"Now we have just demonstrated the world's first electronic device in silicon systematically created on the scale of individual atoms."

Simmons said commercial applications for the technology were about five years away. Her team is now working towards the first ultra-fast quantum computer, predicted to be the size of a current silicone chip.