Intel raised the speed bar to 1.8GHz for its family of Pentium 4 chips, up from 1.7GHz. The company also introduced a 1.6GHz P4 model; now Intel offers P4s at 100MHz increments from 1.3GHz to 1.8GHz.

The new chips are meant to provide customers with additional price/performance points, according to George Alfs, Intel spokesperson.

Expect 1.8GHz and 1.6GHz systems at launch from major vendors, although some, like Gateway, may introduce models with one chip first and then follow shortly with the other. P4 systems are best suited for demanding multimedia applications and video encoding and decoding, along with some Internet and networking tasks.

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Intel expects a 3 to 7 percent performance gain, on average, with each 100MHz increase as you move from one P4 to the next one above it. That may not be enough to overcome AMD's Athlon, now up to 1.4GHz, on many applications and tests. PC World tests on systems with Intel's 1.7GHz P4 show it still lags behind those using Athlon's 1.33GHz chip on a number of measures, though the Intel PCs do considerably better on tests such as video encoding.

Prices for top-level Pentium 4-based PCs still tend to be a few hundred dollars higher than high-end Athlon PCs, however. That may change with the introduction later this year of P4 motherboards using SDRAM memory instead of more costly Rambus memory, previously the only option for P4 systems.

The new 1.8GHz and 1.6GHz chips will be priced at $562 and $294, respectively, in quantities of 1000.

Shane Rau, analyst with IDC, doesn't expect the 1.8GHz P4 to have a significant impact in the market--that is, it probably won't spur really high demand for PCs. For that, look to Intel's next generation Pentium 4, likely out by year's end, which will be made using the new .13-micron process, an improvement over the .18-micron process used in making most chips.

"Intel really wants to get to .13-micron and 300mm wafers, both to increase capacity and cut costs dramatically," Rau says.

The forthcoming chip, code-named Northwood, should also be faster and more efficient than the current crop of Pentium 4s. Prior to that, expect Pentium 4's to hit 2GHz.

Intel has already introduced the .13-micron manufacturing process to Pentium III chips for servers, and forthcoming Pentium III processor M mobile chips, formerly code-named Tualatin.

That part of it is already out and working, says George Alfs. He says Intel has also developed a new architecture in the Pentium 4 with a longer pipeline and plenty of headroom for growth, and 300mm wafer and 12-inch wafer fabs should be up and running early next year. With all that, Intel feels it has everything a semiconductor company needs to be ready for the future and to take advantage of the next upturn in business, he adds.