Intel made two stunning disclosures Tuesday, demonstrating a Pentium 4 processor running at 3.5GHz and then admitting that CPU speed isn't everything when it comes to chip performance. "GHz are necessary but not sufficient," says Paul Otellini, executive vice president of Intel's Architecture Group, during a keynote address here at Intel's Developer Forum. It's not a dramatic about-face from Intel, a company that has built its fortune on convincing PC buyers that more speed is better. Instead, it's a simple recognition that at some point, processors will have to do more than just run faster. Forthcoming processors will have to work in new ways to run enterprise-level applications. Otellini says they'll have to operate with less power and offer larger degrees of parallel processing if performance is going to reach new milestones. And, of course, the chips will also have to get faster. A speeding P4 Intel wants to emphasize its plans for improving processors beyond speed jumps because, in large part, the frequency issue is handled for the near future. The 3.5GHz P4 chip demonstrated at the developer's forum uses the company's new .13-micron production process, which produces a smaller, more efficient chip than the current .18-micron process, Otellini says. On Monday, Intel launched its 2GHz P4, and systems using the new chip are already available. No word yet on when a 3.5GHz P4 will be ready for the marketplace. In coming years, the P4 architecture will scale to 10GHz, Otellini says. After all, some applications out there - such as voice recognition, video encoding, and others - already need more MIPS, or million instructions per second, than today's fastest processors can provide. More than speed needed With frequency leaps sufficient for the near future, Intel is focusing additional attention on other processor improvements, Otellini says. The company is encouraging its vendor partners to take advantage of those chip improvements with new functions in PCs and software. For example, system vendors will have new opportunities in the company's upcoming mobile processor, code-named Banias. Due in the first half of 2003, the mobile chip will feature an entirely new core that is designed to use less power while maintaining performance. By using new low-power circuits and shutting down parts of the chip when not in use, Intel hopes to create a processor that lets thin and light notebooks run for hours on battery power. The same technology will help vendors create PCs with small form factors and smaller, densely packed servers, Otellini says. The Intel spokesman also outlined how the company's Itanium processor, geared toward high-end servers and workstations, will improve in the next-generation version, code-named McKinley. The new chip, featuring more than 220 million transistors, will offer an on-die L3 cache and a host of other improvements, he says. Hyper-Threading pitch The improvement that drew the most obvious enthusiastic response from the developers was Otellini's description of Intel's Hyper-Threading technology. Today, some servers and workstations have the capability to use multiple processors to achieve greater performance in some applications, as the two chips process instructions from the software in parallel. In the future, Intel's Hyper-Threading promises the possibility of achieving multiprocessor-like performance on a single CPU. Hyper-Threading will first appear next year in Xeon server processors (code-named Foster). In those early examples, Intel expects performance gains of up to 30 percent over non-Hyper-Threaded applications. Otellini says the technology eventually will find its way into other processors, and then workstations and desktop PCs. He says the key to moving the technology into desktops is the development of everyday applications that can take advantage of dual-processor capabilities.