Paul Otellini, Intel's president and chief operating officer, in a keynote address dropped hints that the company is developing several highly-integrated chips, including a 1-billion transistor processor.

"We are in development of a 1-billion transistor microprocessor," Otellini said. "It's not rocket science and we are well on our way."

The Intel COO provided few details about the 1-billion transistor processor, but noted that chip would "integrate logic, graphics and security."

The proposed 1-billion transistor processor is part of Intel's "convergence" push, which promises to accelerate the development computing and communications in the marketplace, he said.

During the keynote, Otellini also demonstrate its latest 64-bit processor, codenamed "Madison." The 500-million transistor chip is the follow-on to the company's current 64-bit processor, dubbed McKinley or Itanium 2. "Madison" is Intel's most highly-integrated chip in terms of transistor count, it was noted.

Analysts said that Intel has been unable to gain much traction with its current line of 64-bit Itanium chips. But still, the Santa Clara-based company is moving full speed ahead in the market.

In fact, Intel has been talking about "Madison' for some time. As reported, the company is aggressively developing a line of 64-bit chips to compete with a similar product from rival Advanced Micro Devices Inc. Intel is sampling "Madison," with shipments due in 2003 (see Feb. 26 story ).