He said the 0.18-micron feature-size die shrinks will allow Intel to produce 30% more chips on each 8-inch wafer. He claimed 0.18-micron processing will be a major factor in reducing the production cost of Pentium III processors in the fourth quarter of 2000 by 50% from the current cost.

Celeron processor production costs will be cut 20% in the same time period, largely by going to a new flip-chip plastic gate array packaging.

Otellini said Intel will introduce its Timna single-chip computer early in the second half of 2000 in time to catch the back-to-school market. He reiterated that Timna will integrate the microprocessor, graphics, and memory controller on a single chip. "We have created a bill of material for Timna that assures us we can sell it at a very low price," he added.

He also said the Santa Clara-based chip giant will use its newly-acquired digital signal processor (DSP) technology to create a new integrated DSP-flash-microcontroller chip for future use in wireless handsets.

Otellini said Intel intends to use the Itanium (formerly called Merced) 64-bit microprocessor to be unveiled in the second half of 2000 to boost the firm's share of the top-end server market from the present "single-digit percentage to 21%" in several years. He said new midrange server microprocessors to be introduced next year -- believed to be code-named Cascade -- will triple the firm's market share from the current 20-to-25% range.

He reiterated that Intel's first 300-mm production line will use 0.13-micron processing at its Hillsboro, Ore. development fab. He said the projected fab now on hold at Ft. Worth, Tex., is a tentative candidate for the first 300-mm full-scale production fab. No timetable has yet been set for launching that fab, he added.

Intel president Craig Barrett, asked how long Moore's Law could continue, estimated the chip industry can still continue for another 10 to 15 years on the pace of doubling transistors on a chip every 18-to-24 months.

"However, below 0.05-micron processing, the leakage current of transistors means CMOS technology no longer works," Barrett said. "We need another type of switch on the chip, but we don't know yet what that could be."