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Intel, the world's biggest chip maker, on Tuesday announced a new microarchitecture that it said would make its processors ten times more powerful by the end of the decade while consuming a tenth of the energy currently needed.

Paul Otellini, chief executive, told the Intel Developer Forum in San Francisco, that the new design would combine features of an existing desktop PC microarchitecture built for speed and those from a mobile one that optimised power consumption.

“We can significantly reduce energy costs around the world,” he said, citing savings of $1bn a year from the new architecture. An estimated 200m computers will be sold this year worldwide.

He declined to give the next-generation architecture a name but said it would include new innovations and appear in the second half of 2006. New processors will be launched in the server, desktop and mobile markets and will have two cores or “brains”, a feature introduced earlier this year.

Advanced Micro Devices, Intel's main processor rival, took out full-page advertisements in major US newspapers on Tuesday, challenging Intel to a “dual-core duel” - a technology benchmark test to prove which company offered the best performance.

“I have always thought that companies are best judged in the marketplace,” Mr Otellini responded.

Intel's processors are in four out of every five PCs sold but AMD has been credited with stealing a technological advantage over Intel of late and launched a major lawsuit in June alleging anti-competitive practices, including threats of retaliation against customers that did business with AMD.

“Intel is trying its best to make incremental improvements to its architecture to try to catch up with the architecture we have established,” said Bahr Mahony, a marketing manager at AMD's microprocessor business unit on Tuesday.

Mr Otellini, in his first major public speech since becoming chief executive in May, said the industry was on a “performance per watt” course that would lead to smaller, sleeker, more energy efficient computers. He demonstrated a concept PC he described as a “handtop” that would consume only half a watt of power.

“We expect to go from five watts to half a watt by the end of this decade, a factor of 10 times less power but a ten-times increase in performance.”

As well as 15 dual-core projects, Intel was working on more than 10 projects containing four or more processor cores per chip, he said.

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