Looking to keep pace with rival Intel in an industry on the move from a 90-nanometer chip design to a new generation of smaller, faster processors, AMD is launching a 65-nm chip for desktop PCs.

AMD on Tuesday announced the move to 65-nm process technology, unveiling it for Athlon 64 X2 dual-core desktop processors. The company reported that the transition to the smaller geometry enables AMD to produce more processors on a 300-mm wafer.

By the first quarter of 2007, PC makers using the new chip will include Acer, Dell, Gateway, Hewlett-Packard, and Lenovo.

Intel switched to the smaller chip architecture earlier this year and has revealed plans to shrink its chip architecture down to 45nm in the coming year.

Basically, a chip built with 65-nm process technology is smaller than its 90-nm predecessor. The chip pieces such as wires and transistors shrink along with it. The smaller chips work more efficiently because of the increased density. They're also cheaper to produce because manufacturers can squeeze more chips onto a silicon wafer.

One nanometer is equal to one-billionth of a meter.

"Customers continue to demand solutions that focus on low power consumption and quieter operation," said Bob Brewer, a corporate VP for AMD, in a statement. "AMD is responding by increasing manufacturing efficiency to deliver on the next generation of energy-efficient desktop processors."

Pricing in lots of 1,000 is $301 for the 5000-series chip; $271 for the 4800-series chip; $214 for the 4400-series chip; and $169 for the 4000-series chip.