SAN FRANCISCO (Reuters) - Intel Corp , the world's largest chipmaker, will be able to make microprocessors with features as small as 32 nanometers within two years, its chief executive said on Tuesday.

Intel is now moving its chipmaking technology to 45 nanometers, but it was the first time that the company had demonstrated working chips based on 32-nanometer technology, said Intel CEO Paul Otellini. Nanometers measure the size of features on a chip.

Otellini demonstrated a dinner-plate-sized wafer made on the 32-nanometer technology that contained memory chips, saying that Intel could make processors based on that process within two years.

That would place it far ahead of its smaller rival, Advanced Micro Devices Inc , which has said it would move to the 45-nanometer chipmaking technology by the middle of 2008.

Otellini also said that Santa Clara, California-based Intel would launch its 45-nanometer-based processors, code-named Penryn, on November 12. It had previously said it would launch by the end of 2007.

He also said that its next-generation design, code-named Nehalem, was complete, and he demonstrated a computer on stage at the company's annual technical conference that was using a Nehalem microprocessor.

(Reporting by Duncan Martell)
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