The better-performing server chips came about as the result of a technology advance Intel announced in January – the 45 nanometer transistor. This transistor, two-thirds the size of the previous-generation 65-nanometer transistors, is so small that two million can fit within the period at the end of a sentence. It is about the same size as the Rhinovirus (the virus that often causes colds).

"We were struggling with power leakage as we were shrinking our transistor size, and we needed a major science breakthrough," explains Rick Jacobsen, director of marketing for financial services at Intel. That breakthrough came in the discovery that a dioxide of hafnium, an element off the periodic table, does a better job at insulation than silicon, thus reducing power leakage. "Energy efficiency is the key concern among Wall Street firms that want to get more work out of their data centers," Jacobsen says. "Improving the insulation and reducing electrical leakage in these tiny circuits has allowed us to significantly improve performance and reduce electrical consumption."

The new material makes possible a 20% improvement in transistor switching speed and a greater than 30% reduction in switching power usage. Intel hasn't completed performance benchmarks at the server level, but Jacobsen believes the same improvements should carry through to the servers. "Wall Street will benefit from the performance right out of the box, he says. "You'll have backwards compatibility with all other Xeon two-socket servers and most will get a performance boost immediately, with further enhancements if you look at your code and do some optimizations."

The smaller size of the new transistors is crucial to fulfilling Moore's Law and doubling the number of transistors on processor chips every year.

In addition to the new Penryn processors powering large servers, they will be used in high-end workstations. Lenovo has already announced a ThinkStation workstation based on Penryn.

The 45nm Hi-k Intel Core 2 Extreme QX9650 quad core processor is priced at $999 in quantities of 1,000. Depending on the model, these processors are available today or within 45 days. Further information is available here.