AMD is cooking up the new Spitfire processor, code-named after the sports car, with the aim of out-powering Intel's Celeron chip in the value-PC space -- generally defined as PCs costing less than $1,000 (£650) For its part, Intel will introduce an improved version of its Celeron chip later in the week. The rival processors will offer a host of improvements over their predecessors, giving consumers higher clock speeds and greater overall performance. Better news: The new chips are not expected to cost more than the current crop of K6-2 and Celeron offerings from AMD and Intel. AMD is planning to match as closely as possible Intel's Celeron in clock speeds. AMD is expected to release Spitfire at four clock speeds, source said: 550MHz, 600MHz, 650MHz and 700MHz. Spitfire will sport 128KB of onboard Level 2 cache. The current K6-2 processor has 512KB of off-chip cache. Integrating cache increases performance and should give the chip an additional performance boost. While AMD's Spitfire chip is expected to be competitive with Celeron in clock speed and cache, it will excel in one area: Spitfire will offer a much faster bus speed than Celeron chips. The bus provides a data pipeline between the chip and a PC's internal components, such as memory. It is the bus speed that contributes to the overall performance of a PC. Spitfire will offer the same 200MHz bus now used by high-end Athlon processors, according to AMD documentation. Spitfire, which will use a new socket package, will be manufactured using AMD's 0.18-micron process, which provides advantages of higher clock speeds and lower power consumption over the current 0.25-micron process used to fabricate K6-2 chips. The chip will replace, over time, the K6-2 processor that is now the mainstay of AMD's value-desktop offering. AMD, in fact, cancelled plans to offer a version of the forthcoming mobile K6-2+ chip for the desktop. Although Spitfire will be based on the Athlon processor core, it will be sold under a different and yet-to-be-announced name. Spitfire is planned for release at mid-year, said AMD spokesman Drew Prairie, who declined to provide further details. "We plan to have competitive frequencies," Prairie said. Intel on Wednesday will announce 566MHz and 600MHz Celeron chips for desktop PCs, sources said. Faster 633Mhz and 667MHz chips are expected within a month. By the time the new Spitfire ships, Intel may be at 700MHz with the Celeron chip, sources said. The new chips will continue to include 128KB of integrated cache, which helps speed performance. They will be the first desktop Celerons to sport Intel's 0.18-micron manufacturing process as well as its Advanced Transfer Cache design and Streaming SIMD Extensions, previously available only in Pentium III chips. Known as SSE, the extensions help process multimedia, such as video, by breaking it up into chunks, which are processed in parallel. Where Spitfire will offer support for a 200MHz system bus, Celeron will continue to support its 66MHz bus. "AMD needs to provide a higher level of performance-per-dollar than Intel, because Intel is the incumbent, the established brand," said Nathan Brookwood, principal analyst at Insight64, a research firm that tracks the processor market. "If (AMD) were to come in with the same level of performance ... I think the market would respond with a deafening thud." AMD will differentiate Spitfire from its high-end Athlon chips with higher levels of cache, faster bus speeds and double data rate DRAM memory, among other things. When it comes to the bus, "Consumers are always impressed by bigger numbers," Brookwood said. Many consumers would like to see Celeron make the jump from 66MHz to 100MHz bus. While it will happen eventually, Intel has no immediate plans to bump desktop Celeron chips to a 100Mhz bus, sources said. Many consumers may not worry about bus speeds, however. Price may be a more important factor. Here, AMD will be competitive with Celeron, with the cost per chip expected to range from about $75 for the 550MHz to $175 for the 700MHz. Bottom line for consumers: "They're buying a box to perform a particular function at a particular price," Brookwood said. "Both guys have a very powerful products and that's a win for the consumer." Intel is suffering from what we might call Microsoft Syndrome, the symptoms are rampant and unnecessary paranoia, read the news comment at AnchorDesk UK with Peter Jackson. What do you expect from AMD? Given the choice, would you buy a Spitfire or a Celeron? Tell the Mailroom. And read what others have said.