However, toward the end of 2006, Intel indicated that it was ahead of schedule for reaching a 45nm fabrication process. In late November, the company stated that it had already produced a prototype of a 45nm processor, and that it was now hoping to release 45nm processors by the second half of 2007.

Why the emphasis on the shift to 45nm? Beyond the simple metrics of cost -- a 45nm process is smaller than today's state-of-the-art 65nm process, which allows for more CPUs to be manufactured per wafer of silicon -- smaller fabrication processes allow for performance boosts via shorter distances for electrons to travel, faster clock speeds, larger cache sizes and reduced energy consumption.

Another important reason behind the frenzied pursuit of 45nm CPUs: Intel wields a significant advantage over AMD when it comes to fabrication process technology. AMD just released its first 65nm processors in December 2006, and it is not expected to move to a 45nm process until mid- to late 2008. Given the theoretical performance-per-watt advantages that 45nm-process CPUs will possess, Intel's rapid transition to 45nm could place considerable pressure on AMD to catch up.

Enter the 'Penryn' processors

Intel's 45nm process will manifest itself in a microprocessor architecture known only by the code name "Penryn." Not surprisingly, Intel has kept a fairly tight lid on Penryn, but based on rumors and speculation by analysts and experts, it appears that these processors will be based on the Core 2 architecture, but will take advantage of the 45nm processor to provide larger L2 caches and increased performance. (It's worth noting that Penryn will also serve as Intel's mobile processor architecture, with laptop CPUs scheduled for release in early 2008.)