Intel Keeps On Ticking

SAN FRANCISCO, Calif. -- The global economy may be staggering. Regulators may be howling. Intel's mighty factories, however, continue grinding out processors with ever smaller transistors.

At the Intel ( INTC - news - people ) Developer Conference Tuesday, Intel Chief Paul Otellini announced that the company has begun production of processors with features as tiny as 32 nanometers wide and promised a new generation of processors using even smaller transistors.

Intel rival Advanced Micro Devices ( AMD - news - people ) won't make the shift to 32 nanometer technology until the end of 2010, with volume production beginning in 2011. By that time, Intel will be making the shift to chips with transistors even smaller than that.

At the conference, Otellini held up a wafer he described as the first working chip built with features just 22 nanometers wide. The test chips include more than 2.9 billion transistors packed into an area the size of a fingernail.

Otellini's announcements came a day after the European Commission released the text of its decision to fine Intel 1.06 billion euros, or $1.44 billion, in May after ruling the chip giant used anti-competitive practices to get an edge over rival microprocessor company AMD. In response to the decision, Intel said in a statement that "the Commission's conclusions regarding our business practices are wrong--both factually and legally--and we have appealed the Commission's decision."

Intel's plan is to alternate between introducing a new manufacturing process one year and a new microprocessor design the next. Next up: a new processor design. The new microarchitecture, dubbed Sandy Bridge, will feature a graphics core on the same die as the processor core.