New Generation of CPUs Could Help Intel Regain Ground

Intel Corp. (INTC) took the wraps off fast new energy-saving computer chips on Thursday as the No. 1 chipmaker moves to take back the technology lead from smaller rival Advanced Micro Devices Inc. (AMD)

The new processors, known as the Core 2 Duo family, have two computing cores on a single chip, allowing users to run many data-intensive programs at the same time.

They are also built on a new microarchitecture — a chip's basic blueprint — that makes them consume less power than their predecessors, the flagship Pentium line.

That has been a key consideration among big customers, some of whom have tens of thousands of computers, as they look to trim their energy bills.

"This isn't just an incremental change in terms of performance, it's a revolutionary leap," Intel Chief Executive Paul Otellini said, adding the desktop chips deliver 40 percent faster performance while cutting power usage by 40 percent.

The laptop chips will run 20 percent faster, he added.

Otellini was speaking at the company's headquarters in Santa Clara, Calif.

"Certainly as far as their previous products, it's a huge leap ahead," Jim McGregor, principal analyst with technology market research firm In-Stat, said of the new chips.

Core 2 Duo is the third of four major products Intel is launching this year. It has already unveiled two new server chips and a revamped processor for laptop computers is also expected soon.

Tsuyoshi Abe, an Intel sales and marketing general manager, expects a tough fight with AMD, but is confident of taking back market share with the new Core processors.

"The competition in the market will continue to heat up as every maker tries hard to improve its products, but I believe our new processors can help us beat our competitors," Abe said at a news conference.

Intel will start shipping a total of 10 new processors for desktop computers in early August and for laptops at the end of August, the company said. It has priced the desktop processors from 21,230 yen ($182.5) to 115,900 yen ($996.3)

The introduction of new products has been accompanied by steep price cuts on older Intel chips, many of which have been stuck in inventory as the company lost market share to AMD.

"You've got to give Intel credit, they've come back with a much more competitive architecture," McGregor said.

Intel is hoping the new chips will rekindle growth at the Silicon Valley stalwart, which has seen its share price hit by falling market share and profits.

AMD, invigorated by its recent success, has ambitious plans to more than quadruple output over the next few years in its quest to eventually take more than 30 percent of the market.

AMD is estimated to have nearly 20 percent of the market for desktop PCs and about 25 percent of the market for server computers running the chips made by it and Intel, known broadly as x86 processors.

But AMD is being forced to respond to Intel's price cuts and analysts say its average selling prices probably will not get a boost until it launches its own new products in the middle of next year.

"Just as Intel still has a few holes in their road map, their product lineup, AMD does as well. They still don't have a competitive low-power mobile architecture," McGregor added.