On 28 March 2007, Intel announced details of its next two processor families, Penryn and Nehalem. Both processors will be based on Intel's new 45-nanometer (nm) manufacturing process. Intel will begin producing Penryn processors in 2H07 and Nehalem in 2008.

The Penryn family of processors will continue the architecture of Intel's Core 2 processors released in 3Q06, but add improved performance, higher clock speeds, additional instructions for media processing and lower power requirements. Penryn processors are likely to first appear in server products in 4Q07 and arrive on client systems early in 2008.

Nehalem is a new processor design that introduces several new features. Most important will be a move to new direct connections between processor cores and an integrated memory controller which reduces cost and boosts performance. Intel has historically objected to tying processor designs to memory technology due to the different rates of change between the two. However, Gartner believes that Intel's new two-year cadence on new processor architectures eliminates this concern.

Nehalem also reintroduces a form of hyperthreading (the ability to process two threads concurrently on a single core, first introduced with Pentium 4) and the smaller chip will reach to eight core processors. Intel also noted that it will include an integrated graphics controller on some client versions of the chip, simplifying system design and enabling lower-cost systems.

We believe that Penryn and Nehalem will challenge AMD, which now has approximately 12 months to bring a new product into the market that leverages its October 2006 merger with ATI. Moreover, AMD must invest smartly to deal with Intel's capital infrastructure or risk falling significantly behind Intel in manufacturing technology and processor design.

• Corporate buyers: Plan for significant system upgrades from Intel in 2008 across servers, workstations and mobile devices. Consider adoption of Penryn systems only once Intel's PC original equipment manufacturer partners deliver corporate systems at the same price as current systems, which will likely occur by mid-2008.

• "New Products Promise a Competitive Turning Point for Intel” — The Core 2 Duo product introduction will help Intel deal with the performance challenges set by AMD. By Steve Kleynhans and Mark Margevicius
• "The Impact of Moore's Law on Client Systems” — Buyers must look for capabilities beyond raw performance when evaluating new processors and architectures. By Steve Kleynhans

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