AMD is on schedule to deliver the first processors based on its advanced 65nm (nanometre) manufacturing process in the fourth quarter of this year.

The processors, to be manufactured at the company's plant in Dresden, Germany, will be targeted at notebook computers, PCs and servers.

AMD expects full conversion to 65nm technology by the middle of next year from the current 90nm technology. A nanometre is a billionth of a metre, and the figure refers to the smallest features etched in the surface of each chip.

The new high-performance chips are designed to offer faster reaction times and use less energy than previous generations, an AMD spokesperson said.

The memory controller, for instance, is integrated into the processor, enabling direct communication with peripheral devices instead of having to pass through an external chip first, according to the spokesman. "Reaction times are noticeably faster in the new chips," he said.

The chips have also been designed to consume less energy in notebooks and servers alike. "Groups operating large server farms, such as ISPs, are particularly interested in computers that are energy-efficient to drive down their operating costs," the spokesman said.

Development of 45nm technology is also on track, he said, with the first processors expected later in 2008. AMD is collaborating with several partners, including IBM, in the development of this new technology.