Intel is releasing two chips that will compete directly with Transmeta's Crusoe processors in the notebook market, and the scary part for Transmeta is that it didn't take Intel long at all. On Tuesday, the Santa Clara, California-based chipmaker is releasing a 500MHz Pentium III that is "the lowest-power-consuming PC processor that has ever been built", said Frank Spindler, general manager of the mobile products group at Intel. It is also releasing a similar 500MHz Celeron for budget notebooks. The two ultra-low-power chips are aimed directly at taking the spotlight away from Transmeta, which last year came out with chips that can run standard notebook applications without consuming as much power as traditional Intel chips. "This is The Empire Strikes Back in some sense," said Nathan Brookwood, an analyst at Insight 64. On average, the new Pentium III consumes about half a watt of power, or less than half the power of Intel's current notebook chips. IBM has incorporated the chip into a ThinkPad for the Japanese market that can run about five hours on a single battery charge, Spindler said. The IBM notebook contains a fan, but some models coming from other hardware manufacturers will not. Although comparing the battery performance between Intel's and Transmeta's chips has proven difficult because of changes in notebook designs and other factors, the IBM results seem to indicate Intel has roughly achieved parity with Transmeta. The ThinkPad containing the ultra-low-power Pentium III was originally designed with a Crusoe processor in mind, IBM representatives said recently. IBM, however, pulled the plug on the Transmeta project because the notebook was showing battery life of less than six hours. Although that's better than most notebook chips, the additional cost involved in testing and marketing a new chip prompted IBM to pass. Spindler said Intel's current 600MHz Pentium III for notebooks, which consumes more power than the new chips, outperforms Transmeta's Crusoe. The Pentium III 600MHz "will perform two to three times as fast as the Transmeta", Spindler said. In a potentially more ominous note for Transmeta, it didn't take a huge technological effort for Intel to close the gap. The new ultra-low-power Pentium III and Celeron chips do not differ substantially from an architectural standpoint from mobile Pentium IIIs or Celerons released last year, Spindler said. To cut power consumption, Intel essentially took advantage of certain characteristics it discovered after the chips came out. Intel first announced the chips in October. "Intel can get into this market segment without a major development effort," Brookwood noted. Toward the middle of the year, Intel will see additional power consumption improvements when it switches from the 0.18-micron manufacturing process to the 0.13-micron manufacturing process. Not only will this result in smaller, cooler chips, but these processors will be made with copper, rather than aluminum, wires. Because they conduct electricity better, copper chips will reduce power consumption. Although the battle between Intel and Transmeta has become one of the major debates in the semiconductor world, Spindler acknowledged that it also is a sideshow in the greater scheme of things. These ultra-low-power chips go into miniature notebooks, or sub-notebooks, which generally contain small screens and keyboards. To date, these notebooks have primarily sold in Japan and in limited numbers. By contrast, the main segment of the notebook market is moving to "thin and light" designs. These notebooks generally measure slightly over an inch thick and have 13 to 14-inch screens. "Roughly 60 percent of the [notebook] market will migrate into this thin-and-light segment," Spindler said. Like other mobile Pentium IIIs, the new chip contains SpeedStep technology, which lets the chip run at a slower rate when operating on battery power. The chip runs at 500MHz when plugged into a wall and at 300MHz on batteries. The Celeron does not contain SpeedStep. Both, however, contain QuickStart, which reduces power consumption between keystrokes. In volume, 500MHz Pentium IIIs cost $208 each, while the Celeron goes for $118. These prices are higher than those for some other mobile Intel chips. "To get the quality of silicon here, there is some premium for the low-voltage capabilities," Spindler said. See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.