Craig Barrett, Intel's chief executive officer, said in a keynote address on Tuesday that the long-awaited chip, code named Merced, is on schedule for mass production in the middle of the next year. He didn't quantify its processing speed but demonstrated that the chip could handle complex three-dimensional animations.

Merced is Intel's first chip that processes 64 bits of data at a time, rather than 32 bits, which should greatly boost its power when using specially designed software. Significantly, the prototype was shown running an early 64-bit version of Microsoft Corp's Windows 2000 operating system, another long-delayed product expected to be crucial to both companies' success in high-end computers. The Merced chip also runs a 64-bit version of Linux operating system, the free programthat is growing in popularity.

Intel's slow progress in finishing the long-delayed Merced has been a source of frustration in the personal-computer industry. "I was impressed that in the course of two weeks they were able to get that software up and running on a sample chip," said Richard Doherty, an analyst at Envisioning Group in Seaford, New York. "It shows that they haven't slipped further."

Intel made some other announcements that will have broad impact in the PC industry. For instance, Barrett said that Intel and computer makers resolved a dispute over the future technical specifications for moving data within a computer. The dispute over the next-generation input-output technology in the computer, commonly known as a bus, ends a fractious debate that pitted Intel and ally Dell Computer Corporation against three companies, that came up with a rival technology. The three companies are Compaq Computer Corporation, Hewlett-Packard Company and International Business Machines Corporation (IBM).

MichaelSlater, an analyst at Cahners Micro Design Resources, said that the parties appeared to end the conflict when Intel relented on a requirement that all parties involved give up the rights to royalties on patents related to the technology. The IBM group felt that it had valuable patents, and all parties have now agreed to license each other the technologies involved on a "fair and equitable basis," meaning that companies with key patents such as IBM can collect royalties from those that don't.

The Wall Street Journal