The initial batch of 65-nm chips available this week is the Athlon 64 X2, typically used in desktop PCs. In making the announcement, AMD executives said that even at 90 nanometers and 90 watts, its chips, on average, consume half the power of an Intel Core 2 Duo. But Athlon's power consumption will drop even further, AMD said, with the 65-nm chips that will run at an average 65 watts.

Processors manufactured with 65-nm technology have smaller internal features than chips made with 90-nm technology. In addition, AMD noted, the 65-nm chips consume about 30 percent less energy than the same ones produced on the 90-nm process when running at the same speed.

New Machines

The new 65-nm manufacturing process is in keeping with Moore's Law -- the observation made in 1965 by Intel cofounder Gordon Moore that the number of transistors per square inch on integrated circuits will double roughly every year, meaning that chips will continue to get smaller and more powerful.

Generally speaking, as processors get smaller, they also can operate more efficiently due to increased density. And they can be manufactured less expensively because more chips can be packed onto a single silicon wafer.

Among the computer makers creating systems with the new energy-efficient Athlons are Acer, Dell, Gateway, Hewlett-Packard , Lenovo, and Packard Bell.

The first PCs will ship this month, in time for the holidays. AMD expects to gradually move all its chip lines from the 90-nm to the 65-nm process in the first half of 2007.

Selling Point

AMD plans to sell the Athlon 64 X2s at four different speeds, ranging from $169 to $301 each.

Meanwhile, Intel continues to push its own innovations. Last month, Intel released its much anticipated quad-core processor, the Core 2 Extreme QX6700. The new chip, codenamed Kentsfield, has four physical processing cores, making it capable of advanced multitasking at extreme speeds.

Intel's new chip costs the same as the 2.93-GHz Core 2 Duo Extreme Edition X6800, which runs around $1,000.

AMD has not yet released a quad-core processor, but the company made headlines last week in introducing a quad-core platform designed to connect two dual-core processors in an efficient motherboard design, called the Quad FX Platform.