It's a new year and a new round of processor battles between Intel and AMD. As previously reported, Santa Clara, California-based Intel on Monday is expected to release a new, smaller and faster version of the Pentium 4 running at 2.2GHz and 2GHz, while AMD is expected to come out with its Athlon XP 2000+, which runs at 1.67GHz. A variety of computer makers will turn out new PCs that use the Intel chip, Intel said, while Compaq Computer will release a new Athlon-based box, with Hewlett-Packard following soon afterward, according to AMD. Although the AMD chip churns at a slower pace, the actual performance between the two processors is relatively close because the chips employ different architectures. "It is so close you are going to need a photo finish," said Nathan Brookwood, an analyst at Insight 64. "Different benchmarks will show different things, but the two are right on top of each other...You might see Intel ahead by a nose." Because of the close performance, victory in the companies' ongoing war may rest on other factors. Intel's chips are slightly larger, measuring 146 square millimeters. AMD's measure 128 square millimeters and will shrink to 80 millimeters in the first quarter. Smaller chips are cheaper to make, so AMD enjoys some advantage there. Intel is releasing its chip with a new chipset that allows PC makers to hitch the Pentium 4 to DDR memory, a faster version of standard memory. While this will expand the variety of Intel PCs on the market, introducing a new chipset is never easy and can result in sporadic shortages. AMD made the DDR DRAM leap 14 months ago. Still, Intel is Intel and has a massive manufacturing operation, an efficient worldwide sales force, and long-standing relationships with corporate customers. The company this year will also shift to using wafers with 300-millimeter diameters, larger than the 200-millimeter wafers used today. This will allow Intel to effectively produce 2.5 times more wafers for roughly the same cost. AMD won't shift to 300-millimeter wafers until 2005. "That investment in 300 millimeter will pay off for us in volume," said Louis Burns, vice president and general manager of the desktop products group at Intel. "We're going to be hitting huge volumes of the Pentium 4 this year. We will hit all price points at all levels." Intel also will continue to work with the industry to popularise multimedia and entertainment applications, a specialty of the Pentium 4. For instance, Burns showed off a prototype machine called the Intel CEL. The CEL looks like a small cable box and allows people to attach a PC to a stereo or TV and then feed data into it. With the CEL, a TV can be used to show digital photos or capture live TV a la TiVo. At one point, Burns was running two video streams, playing music and recording video on the same PC. "This kind of capability will be commonplace in the 2003-2004 time frame," he said. The Athlon, however, is no slouch when it comes to these applications, added Brookwood. The updated design of the new Pentium 4s, code-named Northwood, will also give Intel the opportunity to pull ahead at times in terms of speed and performance. The Northwood Pentium 4 chips differ from the current versions of the chip in that they are made using the 130-nanometer (0.13-micron) manufacturing process, rather than the 180-nanometer process used to make existing Pentium 4s. The 130-nanometer designation refers to the average size of the features on the chip. The manufacturing switch results in a shrinking of the chip. Older Pentium 4s measured 217 square millimeters and cost about $100 (£70) to manufacture, estimated Kevin Krewell, an analyst at the Microprocessor Report. The Northwood chips will cost about $55 to make. At the same time, performance will improve because Northwood chips will offer, along with the higher clock speeds, a larger secondary cache--a reservoir of memory located on the same piece of silicon as the processor for rapid data access. Northwood chips will contain 512KB of cache; current Pentium 4s contain 256KB. "Because of the increase in cache and the boost in clock frequency, Intel will start to pull away from AMD," Krewell said. "Even with the larger cache, (the chip) is going to be smaller." Of course, the two companies say the difference between their chips is far more substantial. "Unequivocally, it is the fastest thing on the planet," said Burns of the new Pentium 4 chips. Mark Bode, division marketing manager for AMD, responded, "We've got a product that is hands down the proven performance leader." The 2.2GHz Pentium 4 will sell for $562 in 1,000-quantity units, while the 2GHz version will sell for $364. The new Athlon XP 2000+ costs $339 in volume. Price cuts from Intel will likely come toward the end of the month, as the company cuts prices on the last Sunday of each month.