The Associated Press
updated 12/1/2003 1:46:41 PM ET 2003-12-01T18:46:41

Intel Corp., the world’s largest maker of semiconductors, on Monday said it has built test chips using next-generation 65 nanometer technology and expects to be the first to produce them, in 2005. The demonstration chips compare to 90 nanometer chips slated to be shipping in volume early next year and 130 nanometer chips that are currently in wide use. One nanometer is one-billionth of a meter.

THE SMALLER THE circuitry the more transistors can be packed into a chip for more functionality and better performance.

The 65 nanometer process will enable Intel to double the number of transistors it can put on a single chip from today’s chips, the company said.

The transistors on the Static Random Access Memory (SRAM) test chips are so small that 10 million of them would fit in one square millimeter, roughly the size of the tip of a ball point pen, according to the Santa Clara, California-based company.

Intel does not make SRAM chips but chose them for the test chips because they use similar process elements as microprocessors, which perform the computing functions in PCs and other devices, said Mark Bohr, director of process architecture and integration at Intel.

The news was not a surprise to analysts, who said Intel is the leader in manufacturing, which is the competitive differentiator in the chip industry.

“This is Intel pounding their chest (and saying) not only are we ahead in 90 nanometer and ramping, but we’ve got the next process behind that,” said Gus Richard, an analyst at First Albany Corp.

Intel will benefit from being able to reuse many of their tools used for 90 nanometer chips on 65 nanometer chips, he added.

“They were able to do this without significantly changing the hardware or equipment,” said Steve Kleynhans of META Group. “They can leverage the investments they’ve made over the last couple of years and should be able to stay as the lowest, or one of the lowest-cost manufacturers in the industry.”

During the three-year chip industry downturn Intel spent about $28 billion on manufacturing capacity and research and development, the company said.

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