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Intel Reaches For Ever Smaller Processors: Page 2 of 3

The difficulty Intel will have in manufacturing products for such a wide spectrum of devices will be in maintaining a commonality in the technology layer, while also optimizing it for devices that handle vastly different workloads. "Only time will tell," Kikhi said of Intel's chances of success.

Intel plans to start producing 32-nm processors in volume for computer makers in the fourth quarter of this year. A nanometer is a billionth of a meter, and the number refers to the size of the circuitry on the chip. By stuffing the processor with more transistors and other components, chipmakers are able to boost performance, or clock speed, of the processor while consuming less energy as the previous generation.

Intel's first 32-nm chips, codenamed Clarkdale and Arrandale, will be for mainstream desktop and laptop computers, respectively. In 2010, Intel will ship 32-nm chips for high-end desktops and servers.

For smartphones, Intel will leverage its low-power Atom processors used in netbooks today. The processors will be incorporated in many system-on-a-chip products for small Internet-enabled devices. Intel has not released a timetable for those products.

Intel is also focused on embedded devices, found in industries including manufacturing, energy, medicine and point-of-sale terminals in retail. Intel expects 15 billion devices to be connected to the embedded Internet by 2015, up from 5 billion today, Doug Davis, VP and general manager of the Embedded and Communications Group at Intel, said.