  We report the coherent manipulation of internal states of neutral atoms in a
magnetic microchip trap. Coherence lifetimes exceeding 1 s are observed with
atoms at distances of $5-130 \mu$m from the microchip surface. The coherence
lifetime in the chip trap is independent of atom-surface distance within our
measurement accuracy, and agrees well with the results of similar measurements
in macroscopic magnetic traps. Due to the absence of surface-induced
decoherence, a miniaturized atomic clock with a relative stability in the
$10^{-13}$ range can be realized. For applications in quantum information
processing, we propose to use microwave near-fields in the proximity of chip
wires to create potentials that depend on the internal state of the atoms.
