Intel on Thursday staged its biggest microprocessor launch in more than a decade in a move to reclaim technology leadership from its smaller rival Advanced Micro Devices.

The company unveiled its Core 2 Duo chip at its Silicon Valley headquarters, the first time it had held such a ceremony there since the launch of its first Pentium processor in 1993.

AMD became a bigger threat to Intel this week with its acquisition of the Canadian graphics chipmaker ATI Technologies in a deal worth $5.4bn. It said the deal would help it to match the platform of integrated own-brand chips that Intel provides for business customers, while offering superior graphics for notebooks.

“We are still evaluating what the situation means to us and the industry,” Paul Otellini, Intel chief executive, told reporters at the launch.

Intel is counting on the Core 2 Duo desktop and notebook chips, codenamed Conroe and Merom, to fire a second-half comeback after the company’s two most disappointing quarters since the dotcom bubble burst.

But Wall Street appeared unimpressed with the launch yesterday – Intel shares closed 0.2 per cent lower at $17.47.

The company aims to win back market share from AMD and Conroe and Merom are expected to reinforce its overwhelming leadership in enterprise PCs and mobile computing while helping it in the fight for share in consumer PCs. Its “Woodcrest” chip for servers, introduced in June, completes the new line-up against AMD.

Mr Otellini said the Core 2 Duo processors were “simply the best processors in the world,” and quoted reviews from specialist magazines to back up his claim.

“This is not just incremental change in terms of the capabilities of this machine, it’s a revolutionary leap,” he said.

The Core 2 Duo is shipping immediately on “Extreme” edition PC gaming machines and costs $999. Other versions, priced from $183, will appear in August in consumer and enterprise desktop PCs, followed by notebook computers later in the month.

It is based on Intel’s first new micro architecture in five years, one founded on the energy-saving principle of “performance per watt” rather than the previous generation’s focus on blazing speed.

Dozens of computers were on display featuring the new chips and the Intel chief said they already had more than 550 design wins – the largest in Intel’s history.

Intel said its new desktop chip contained 291m transistors, had two processing cores or “brains” and consumed 40 per cent less power than the previous generation while offering a 40 per cent increase in performance.

But the operating system that will best take advantage of the extra power and drive sales – Windows Vista – is not due until early next year.

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