Intel CEO Craig Barrett said this week his company Intel would break with tradition and move quickly to the next manufacturing technology despite the fact that the latest chips they're making are less than a month old. Typically, Intel technology generations last two to three years, but the company is ramping up R&D in the face of competition. Intel sees a 500 MHz Pentium II CPU hitting store shelves by 1999.

To make microprocessors that run that fast, Intel will need to switch to a new 0.18-micron technology. Today's fastest CPUs use a 0.25 or 0.35-micron process. The smaller the chip, the cooler--and faster--it can run. Smaller chips also use less power.

In discussing these changes, Intel also outlined a bit of their future plans. The 500 MHz Pentium II due in early 1999 will likely be a premium priced Slot 2 only design, meaning it will be expensive and relegated to servers only. The chips will also ship with the MMX2 instruction set, code-named "Katmai". Katmai features will filter down to other Pentium II CPUs in 1999 as well, Intel says. Also in early 1999, mobile Pentium II processors will be bumped up to 333 MHz and Celeron processors will get more L2 cache and higher CPU speeds