Demand for chips is shrinking, so Intel has to take a drastic step to improve demand for its products, said analyst Gold.
With chip demand slowing, the returns on developing 45-nm laptop chips may also be minimal, Gold said. Intel's shift to the 32-nm process is smooth, which provides an incentive to quickly move to Westmere chips, he said.
"The optimum time to shift is when demand is down and risk is less," Gold said.
Earlier on Tuesday, Intel CEO Paul Otellini said the company would spend US$7 billion over the next two years to revamp manufacturing plants.
Intel is prioritizing its move to the new 32-nanometer process technology to lower chip-manufacturing costs and increase production. That will help the company make more chips at lower costs and add efficiencies to the production process, Intel officials said on Tuesday.
The new manufacturing process will also help create tiny integrated chips that can be fit into devices like set-top boxes and TVs, Intel said during its fourth-quarter earnings call in January. That could help Intel enter new markets and add revenue opportunities.
Intel will begin producing chips with 32-nm circuitry in four fabs starting in late 2009. A nanometer equals about a billionth of a meter. In chip manufacturing, the figure refers to the denser features etched on the surface of chips. Chip manufacturers like Intel and AMD are building smaller and smaller transistors into chips to perform quicker and draw less power.