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Computerworld - Intel Corp. will make a big leap later this week when it moves from a 45-nanometer manufacturing process to 32nm with three new chips.

Intel is expected to announce the new chips -- and their associated chip sets -- at the International Consumer Electronics Show in Las Vegas. Promoting Intel President Paul Otellini's Thursday keynote address as a big news event, the company is set to unveil three chips from the Westmere family for desktop and mobile PCs.

The Westmere moniker is just the code name Intel has used for the chips internally; they will officially be called Core i3, Core i5 and Core i7. The chips all are based on the Nehalem architecture but are being built on a 32nm platform. Rival chip maker Advanced Micro Devices Inc. is scheduled to release its first 32nm chip in six months or so, but this is the first time Intel has dropped below 45nm, and the move marks a significant milestone for the industry.

"This is a big deal, because these are the first 32nm chips, which is a big shrink versus current 45nm technology," said Dan Olds, an analyst at Gabriel Consulting Group Inc. "AMD is supposed to deliver 32nm chips in 2010, sometime around mid-year. Intel has supposedly been fabbing these new chips since November to ensure an adequate supply, meaning that Intel will be in the driver's seat at least until mid-2010, though it could be longer if AMD's production schedules slip. For their part, AMD needs to get its 32nm technology out on time -- or sooner if possible. The longer Intel has the lead, the more difficult it will be for AMD to regain mind and market share."

With Otellini's big keynote speech coming later this week, Intel released some basic information about the new chips today.

According to Intel, all three new chips will be dual-core models and will use hyperthreading technology, an integrated memory controller and intelligent power gating.

Jim McGregor, an analyst at In-Stat, noted that the 32nm chips will have more transistors than their predecessors, and they will run faster without consuming more power. Intel is able to squeeze so much more onto the new chips that the corresponding chip set packages, which are the groups of chips designed to work together, have gone from three to two chips.

"With this shrink, Intel is able to pull more circuitry onto the chip, such as the memory and graphics controllers," Olds said. "This allows them to eliminate an entire chip, making their processor/chip set solution two chips rather than three. This is important, as it is less costly to manufacture and will reduce costs to OEMs. In turn, this also means that the chips take up less space on the board and will allow smaller and more flexible system form factors. Intel being able to fab these chips in volume puts them firmly in the lead over AMD."

This week's news also means that Intel is keeping up with Moore's Law, the 42-year-old prediction by Gordon Moore which asserts that the number of transistors on a chip doubles about every two years. However, some observers have predicted over the years that leakage and energy consumption would be significant roadblocks to the law continuing to hold true.

Intel, so far, is staying the course. The chip maker moved from a 65nm manufacturing process to 45nm about two years ago, and this week it will make the jump down to 32nm.

"This is the next major process step," McGregor said. "Basically, it gets down to the economics of the industry -- shrinking dies, adding transistors, doing more with fewer resources. This is what it's all about in this industry."

McGregor also noted that this is a critical move, and not just for the PC and laptop industry. The work Intel has been doing on its Westmere line will help the company develop 32nm Atom chips for netbooks and pocket devices in the near future.

"This is important for the PC, but these small-design geometries are critical for netbooks and smartphones," he added. "That's where the most bang for the buck is going to be for 32nm."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, send e-mail to sgaudin@computerworld.com or subscribe to Sharon's RSS feed .

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