The Santa Clara, Calif.-based company also showed a new, low-power microprocessor for notebooks, code-named "Banias," and it disclosed more details of future server-oriented processors, including the "Foster" and "McKinley" chips.

Zooming in on the desktop market, Intel demonstrated a 3.5-GHz Pentium 4, which based on the company's new 0.13-micron process technology. Intel showed a system, based on the 3.5-GHz Pentium 4, linked to several computers via a wireless local area network. The networking scheme was based on the 802.11 wireless LAN standard, it was noted.

Intel's 3.5-GHz processor is a prototype and will not appear in the market until later. But the chip demonstrates Intel's desire to maintain the performance lead in the central processor market against its main rival--Advanced Micro Devices Inc.

At present, Intel's fastest processor is a 2-GHz Pentium 4, which was rolled out by the company on Monday. That 32-bit processor is based on the company's 0.18-micron process technology (see Aug. 27 story).

"Yesterday, we showed a 2-GHz processor," noted Paul Otellini, executive vice president and general Manager of the Intel Architecture Group. "Today, we showed a 3.5-GHz processor. A 4-GHz processor is on the horizon," Otellini said, during today's keynote speech. "We're convinced that we can scale the Pentium 4 to 10-GHz," he added.

Analysts believe that Intel could boost the speeds of the Pentium 4--over time using new process technologies and other techniques. Intel plans to roll out a 2.2-GHz Pentium 4 chip, based on 0.13-micron process technology, by the end of this year. That central processing unit iscode-named "Northwood."

"I think Intel can achieve these performance levels," said analyst Dean McCarron, who tracks the processor industry for Mercury Research Inc. of Scottsdale, Ariz. "But I don't think you will see the 3.5-GHz processor until later next year."

Meanwhile, on the server side of CPUs, Intel today disclosed a few more details about its Foster and McKinley processors. At the high-end of the server market, Intel is currently selling a 64-bit chip, called Itanium. The code-name for Itanium has been "Merced."

The McKinley chip design is Intel's next-generation, 64-bit processor line--a 220-million transistor IC that has been in sampling for the last six months, according to Otellini. But observers do not believe that this chip will be formally introduced until next year.

Unlike the current Itanium chip, McKinley will incorporate the Level 3 on the processor itself. It will also include six-integer unit, as opposed to four with the Itanium, he said.

Another key to Intel's server strategy is the Foster processor. This chip is actually a Pentium 4, which has been tweaked for the server market.

The Foster series of processors will eventually replace Intel's Xeon line, which is based on the company's Pentium III processor architecture.

Systems based on Foster-like processors will not only be geared for the server market, but also mainstream applications. "We would like to migrate server-based processors to the desktop," Otellini said.

Intel is also pouring its vast resources in the notebook side of the market. At IDF, Intel dropped hints that it is developing a new, low-power device--the "Banias" processor design. The company provided little or no details about the product, however.