Intel's Larrabee graphics processor, which is designed to challenge Nvidia and ATI in the high-performance desktop, creative and gaming PC market, will arrive early next year, the chipmaker's CEO said during a quarterly earnings call on Tuesday.

Larrabee will go into "volume introduction...early next year," said CEO Paul Otellini during Intel's discussion of second quarter results with Wall Street analysts.

Intel is "debugging" the silicon chip itself, Otellini said. "The silicon will get ready, or get better, over the course of the year. The software gets finished over the course of the year."

Intel already dominates the market for integrated graphics, which are graphics chips that come attached with a CPU. They're popular in laptop PCs and in business desktops where 3-D graphics or high-resolution video is not needed.

The highly-anticipated Larrabee GPU will be the first Intel has created for add-on graphics cards that users buy separately and plug into the slots of their desktop computer.

Though the market for add-on cards is small and expected to continue to shrink, it is a profitable segment, with top-end graphics cards selling for hundreds of dollars. Intel's entry is also symbolically important as it opens up a new front on rival Nvidia's home turf.

Intel has been coy about how many processor cores Larrabee will have. Nvidia's and ATI's most powerful GPUs have hundreds of cores. Larrabee is unlikely to have as many, since it is based on the more powerful x86 processor, the same that's used in CPUs.

Otellini shed only a little more light Tuesday, saying Larrabee will come in multiple versions, with less expensive versions having fewer cores.

Otellini denied that Larrabee chips have been turning out bulkier than expected. Bulky chips tend to require more electricity for cooling, and also can't perform as fast. That could put off the third-party graphics card makers who would be the market for Larrabee.

Larrabee GPUs that have been publicly shown so far are "high-end...extreme versions, I'll put it that way," Otellini said.

Otellini did not say when he expected graphic cards with Larrabee would begin shipping.