Steadily improving the performance of its chips and put pressure on competitors, Intel Corp. said on Wednesday that it has completed development of its next production process. As a result of the new manufacturing technology, it will be able to produce chips with circuitry just 32-nanometers in size - a billionth of a meter - by the fourth quarter of 2009.

Mark Bohr, who directs Intel’s process architecture and integration, said that the company is expected to share new details about the technology’s benefits, which include transistors that switch 22% faster and are about half the size of those on its current 45-nanometer process.

In one major move, Intel replaced silicon dioxide - a mainstay material - with hafnium for an insulating layer in its transistors, and used metal instead of silicon in a key component called a ‘gate’. This technology in its 45-nanometer process, known as “high-k”, helped in reducing energy consumption, and increased switching speed on chips Intel began selling last year.

With the help of the new production technology, Intel will be able to lower costs and power consumption in chips, and add more speed and functionality. In general, microprocessing speeds are directly related to the number of transistors on a chip - the smaller the transistor, the more can be packed together on a single chip die. Smaller production technology lowers costs by enabling companies to increase output.

Many companies have been trying to reduce, or share the costs of Intel’s manufacturing technology. However, Intel - which supplies roughly four-fifths of the microprocessors in computers - has kept investing to try to gain advantages over competitors.