Intel is to invest $7bn (£4.7bn) over the next two years to bring 32nm chips to market, the company has revealed. The first such processors are now expected to go into production later this year, with additional products following in 2010.

The first 32nm processors are codenamed Westmere and will be a die-shrink of the current Nehalem architecture, but with graphics capabilities integrated with the processor. The initial chips will target mainstream mobile and desktop systems, and were demonstrated by Intel at an event in San Francisco today.

Stephen Smith, vice president of Intel's Digital Enterprise Group, detailed the firm's roadmap to 32nm processors, saying that it will first deliver new 45nm quad-core Nehalem chips codenamed Lynnfield and Clarksfield that target mainstream desktop and thin-and-light laptops respectively.

These will be followed by 32nm processors called Clarkdale and Arrandale, similarly aimed at desktops and laptops, but these initial Westmere chips will have two cores and integrated graphics functions.

"The smaller production process will enable us to reduce the core size while still delivering two threads per core, and with graphics integrated into the processor," said Smith.

Westmere will eventually scale to a six-core/12-thread client processor called Gulftown, he added, as well as platforms for servers.

Intel also said that its 32nm process will be split into two versions, one optimised for mainstream chips and one for system-on-a-chip (SoC) processors aimed at netbooks and other mobile devices.

Mark Bohr, Intel senior fellow for logic development, explained that this is because mainstream chips call for fast-switching transistors, while SoCs require low leakage current to optimise power efficiency.

The graphics inside the Westmere processors will be based on the current graphics functions integrated into Intel's current 4-series motherboard chipsets, but provide "a significant boost in performance", according to Smith.

Oddly, the graphics and memory controller circuits are on a separate 45nm silicon die from the 32nm processor, at least in the first products, although they will be mounted together inside the same chip package.