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(INTC) - Get Intel Corporation (INTC) Report

vowed to release its first volley of quad-coremicroprocessors in November, turning the heat upanother notch on rival

Advanced Micro Devices

(AMD) - Get Advanced Micro Devices, Inc. Report


CEO Paul Otellini kicked off Intel's biannualdeveloper conference Tuesday with previews of various future technologies that ranged from teraflop chips to silicon laser technology, Intel's attempt to make up for a string of financial shortcomings by emphasizing company innovation.

Though still the world's dominant maker of PCmicroprocessors, Santa Clara, Calif.-based Intel haslost market share in the past year as AMD beat it to the punch with dual-core processors that many peoplein the industry consider superior in terms ofperformance and power efficiency.

An inventory glut and falling profit margins have driven Intel to undertake a thorough restructuring that includes plans to trim its staff by 10%, and have contributed to the perception that the semiconductor giant has lost its stride.

Otellini, however, framed the road to Intel's resurgence ascoming from its innovative technology, which he saidwill radically improve the computing experience andthe design of future PCs.

"Now more than ever we need the power that comes withnew silicon," said Otellini.

The popularity of applications such as streaming Internetvideo means that performance matters to consumersagain, Otellini said; while the transition fromdesktop PCs to notebooks means thatenergy efficiency has become "the single biggest shift in microprocessor architecture in a decade."

Shares of Intel closed the regular session up 2.8%, or55 cents, at $19.96.

Otellini said Intel has shipped more than 5 million ofthe recently released Core 2 Duo chips in the past 60 days, the fastest 60-day boost in company history, and atad higher than some analysts' expectations.

Seeking to build on that momentum, Intel set aNovember target date for the first commercialshipments of its next-generation chips: processorspacking four individual computing cores.

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Although Intel had previously indicated that it wouldaccelerate its quad-core launch, the company committeditself to a holiday-season timeline on Tuesday and gave more details about the chips. According toIntel, quad-core processors will provide a 70% boost in performance.

Of course, only a small slice of quad cores will hit the market in November. Intel said the first quadcores will be targeted toward PC enthusiasts, such as gamers, as well as corporate data centers with an Xeon-based version for servers. The mainstream desktopPC version, to be officially called Core 2 Quad, willnot be available until the first quarter of 2007.

Nonetheless, Intel will likely have a quad-core chipon the market before AMD, which is not expected toship a quad-core chip until sometime in 2007.

AMD said it will provide details on its quad-core chip by the end of this year, with plans for the product to be available in the second half of 2007. AMD also has a special gaming product, called 4 x 4, in which two of its current dual-core processors are interconnected, slated to be available in the second half of this year.

"Intel clearly is defining the challenge for AMD,"said Insight64 microprocessor analyst NathanBrookwood.

"Now AMD is going to have to show that even if theyare not there first, that they'll have a competitiveproduct," said Brookwood.

In expediting its shipment of a quad-core chip, Intel's firstversion will essentially consist of two separate dual-core processors bolted together -- something someanalysts say is not a true quad core, which wouldfeature four separate cores on a single die.

Asked about this multichip packaging in a Q&A with thepress after his keynote address, Otellini soundeda bit defensive.

"The initial ones

quad cores are multichip, but sowhat?" said the CEO. "I think you guys are misreadingthe market if you think people care" what thepackaging of the processor looks like.

In fact, Intel took the same tack with its dual-coreprocessors, rolling out a two-chip solution beforeintroducing a true dual core on a single chip. Thisapproach saves Intel time and money because the companydoesn't need to fundamentally alter its manufacturingprocesses.

But because Intel is initially introducing quad coreas a two-chip product, which has an inherentperformance tradeoff, Insight64's Brookwood said thecompany is leaving itself vulnerable to beingoutperformed by AMD when the company introduces its version of the chip.

Intel was also mum on its broader plans regarding the graphics processor market.

AMD recently acquired

ATI Technologies


with plans of eventuallyintegrating the graphics functionality directly intothe microprocessor. In the meantime, AMD has announceda program allowing other chipmakers to developcoprocessors, such as graphics chips, thatcommunicate directly with the microprocessor.

Otellini did not provide details of any potentialsimilar open-socket initiative from Intel and said thecompany's graphics plan in the short term was tocontinue to focus on integrated graphics, which hesaid represent the bulk of the market.