"Had we used the same transistors that we used in our chips 15 to 20 years ago, the chip would be about the size of a two-storey building," said Bill Kircos of Intel.

Paul Otellini, head of Intel, described the challenge of building the chips as "awe-inspiring".

Although the chip-maker is the first company to make microprocessors with such tiny features, other companies, such as Taiwan Semiconductor Manufacturing Company (TSMC), are producing other types of silicon chip.

"We have 45nm designs in production," said Chuck Byers of the firm.

TSMC manufactures chips on behalf of other companies.

Material world

The launch of the new multi-core chips comes nearly 60 years after the transistor was invented.

The brainchild of three scientists working at the research labs of the US Bell System telephone company, the tiny switches have gone on to underpin the silicon age.

The first transistors were crude devices made of several different materials and many centimetres tall.

Over the last six decades, scientists have refined the devices and can now pack millions of them on to a square of silicon.

The onward progression of the silicon industry is known as Moore's Law, and states that the numbers of transistors on a chip will double every two years.

However, as the industry devices have shrunk, researchers have been forced to confront major technical obstacles.

In the latest generation of Intel chips, critical elements of the transistors, known as gate dielectrics, do not perform as well.

As a result, currents passing through the transistors leak, reducing the effectiveness of the chip.

To overcome this, Intel has replaced the gate dielectrics, previously made from silicon dioxide, with a material based on the metal hafnium.

Hafnium is a so-called high-K material, which refers to its dielectric constant, and has a greater ability to store electrical charge than silicon dioxide.

The exact recipe for the new material has not been revealed but Intel says that it offers greater performance at such tiny scales.

Intel co-founder Gordon Moore has described the inclusion of hafnium as "one of the biggest transistor advancements in 40 years".

Tiny tweaks

In contrast, TSMC has said that its chips do not use the new material.

"We have an alternative process that we believe has even more performance value," said Mr Byers.

"One of the strategies we employ is to make it [a manufacturing process] accessible as possible and one of the ways you do that is to change the process as little as possible."

Rather than changing the design of the chips, TSMC has tweaked the manufacturing process to produce the tiny features.

"We work very hard to maintain performance levels with existing materials," said Mr Byers. "For instance, at 45nm there are only a couple or three changes."

"There are several ways to skin this cat," added Gareth Jones, also of TSMC.

However, other companies have signalled their intention to start production of microchips using similar hafnium technology.

IBM, which has developed rival technology with Toshiba, Sony and AMD, intends to incorporate the transistors into its chips in 2008.

Hewlett Packard, Lenovo and Dell have already said that they will use the new Penryn processors in top of the range PCs.