Intel has figured out a way to make its 45nm chips more threatening to AMD - at least this year and adding to its current momentum - while at the same time reinforcing Moore's Law, which says transistor counts double every two years.

It claims it's made one of the biggest leaps in transistor technology in the last 40 years and has gained what it thinks is a year's lead over everybody else.

Intel will be using two "dramatically" new materials wrapped up in a technology called high-k to build the insulating walls and switching gates of its next-generation Core 2 Duos, Core 2 Quads and Xeons.

That effectively makes Intel into a modern-day alchemist coming across the substance that will magically turn base metal into gold.

Gordon Moore himself calls it the "biggest change in transistor technology since the introduction of the polysilicon gate MOS transistor in the late 19660s."

No sooner had Intel whispered this into the ear of the press last Friday under NDA than AMD's partner IBM claimed on Saturday to have made the same breakthrough, working with its Cell mates Sony and Toshiba, causing chip guru Nathan Brookwood to deadpan that it reminded him of a "shootout at the high-k corral."

Of course both companies published parts of their research before this. Intel appears to be ahead of IBM and it's still unclear if AMD will use the widgetry from the start of its 45nm process the middle of next year.

Intel says it's got five next-generation 45nm Penryn chips up and running Vista, XP, Mac OS X and Linux as well as application software and they're supposed to deliver "record-breaking" speed while cutting the perennial electrical leakage problem and with it energy waste. These chips will fit in servers, workstations, PCs and laptops.

Intel says they are completely manufacturable and in volume. Sampling should start soon.

The first Penryn chips, all multi-cores, are due in the second half. With Penryn, Intel will be fitting 400 transistors into a space the size of a single human red blood cell, which is very tiny indeed.

A dual-core Penryn will have upwards of 410 million transistors and a quad 820 million in a smaller die size than current 65nm Intel chips. Intel promises they will support up to 12MB of cache and a bunch of new instructions for media and HPC.

The new metals Intel is using are responsible for increasing the power and cutting the heat. It claims a 20% boost in transistor performance. Bottom line, such dynamics cut manufacturing costs though it will add initially to Intel's manufacturing costs.

Intel will be using hafnium instead of the traditional silicon dioxide for the gate dielectric - gates are where the leaks happen - saying it reduces leakage by 10 times. And since hafnium doesn't go with silicon gate electrodes Intel has developed secret new metal gate materials that it refuses to identify just yet.

The magic is expected to last through 22nm. However, Intel cautions that it's not sure motherboards won't have to be changed to accommodate the Penryn chips.