Intel is planning next year to significantly improve the performance of low-cost desktop PCs by moving its Celeron chip to a new processor core. The chip maker will move Celeron from the Pentium II processor core to the Pentium III core based on its Coppermine technology, sources said. Coppermine is the code-name for Pentium III chips manufactured using Intel's 0.18 micron manufacturing process. The first chips to use Coppermine, Pentium IIIs of 600MHz and greater, are due in late October, sources said. The Coppermine technology offers improvement in clock speed by reducing power consumption and heat production, as compared to the current 0.25 micron manufacturing process. It will also allow space to add on-die or integrated Level 2 cache. Integrated cache runs at full-processor clock speed, as opposed the current half-speed 512KB of off-die cache, Intel officials have said. With the new features and higher clock speed, users who purchase low-end PCs in the first half of next year will have machines that perform as well or faster than the high-end Pentium III PCs that are on the market now. The transitioning of Celeron to the new processor core keeps with Intel's strategy of introducing technology, in this case Coppermine, at the high end and driving it downward in the market. It also keeps with Intel's marketing strategy, which aims to address several different segments with a single processor core, sources said. Pentium III Xeon chips will follow Celeron to Coppermine, sources said. With this transition, Celeron will receive a performance increase thanks to a number of features that are now reserved for high-end Pentium III processors. The list includes Streaming SIMD Extensions, a set of instructions for processing multimedia, along with support for a 100MHz system bus, sources said. Celeron will also adopt a new packaging design, called "flip chip", pin grid array for the 370 pin Socket 370. Flip-chip packaging moves the pins that attach the chip to the motherboard from its edges to its centre, making for a shorter electrical path and a shorter thermal path, and increasing performance and heat dissipation, sources said. The current Celeron chip is based on the 0.25 micron Pentium II core, supports a 66MHz system bus, and incorporates 128KB of Level 2 cache. Intel will release one more chip with this design, a 533MHz Celeron, before the end of the year, sources said. The new Celeron chips will debut at about 550MHz, sources said. But Pentium III on Coppermine won't stand still, coming in at 600MHz and faster. Celeron will remain about one clock speed grade behind it, sources said. Intel will also differentiate between Pentium III and Celeron chips based on Coppermine in other ways besides clock speed. These include chip set technology, memory bus speed and packaging, sources said. While the Pentium III is now available with a 100MHz bus, Intel will increase that to 133MHz at the end of September when it introduces the 820 chip set, sources said. The Pentium III based on Coppermine, will also have twice as much integrated Level 2 cache (256KB) compared to Celeron and will be available in twice as many packages. The Pentium III offer the cartridge-like SECC2 package along with the lower cost flip-chip PGA, sources said. While the Celeron chip will offer much-improved performance for low prices in the first half of next year, Intel will still face competition for design wins from companies making low-end and consumer PCs. Advanced Micro Devices is currently mounting an effort to develop new low-end PC platforms to go with future low-priced versions of its Athlon chip. The company is working on new technologies, such as integrated chip sets, that will allow it to reduce the cost of desktop PCs based around Athlon. And with Athlon at their core, those PCs should rival Celeron-based PCs in performance. Intel officials would not comment on the company's future plans for Celeron. "Currently, our plan is to support the current [Celeron] processor core throughout the end of this year," said Intel spokesman Seth Walker. Generally, "New technology that is introduced [by Intel] at the high-end of the performance spectrum, migrates to the lower end," he said, but he would offer no further comment. Celeron was first introduced in April 1998 as a 266MHz, cacheless chip.