The device is called a nanophotonic avalanche photodetector and is made of silicon and germanium -- both used in current microprocessor chips. The term comes from the way the exchange of information happens, as explained by IBM: "Analogous to a snow avalanche on a steep mountain slope, an incoming light pulse initially frees just a few charge carriers which in turn free others until the original signal is amplified many times."
The rather complicated concept is not new but IBM claims it has been able overcome the speed limitations of previous systems from the likes of Intel and others. It will be a while before we see this integrated into mainstream manufacturing, though. IBM says probably five years for high-end servers and another five for video game systems and cell phones.