By Jonathan Fildes Science and technology reporter, BBC News

The chip has four separate cores Enlarge Image

The first chip to pack more than two billion transistors has been launched by silicon giant Intel.

The quad-core chip, known as Tukwila, is designed for high-end servers rather than personal computers.

It operates at speeds of up to 2GHz, the equivalent of a standard PC chip.

It marks the latest milestone in chip technology; Intel released the first processor to contain more than one billion transistors in 2006.

"It's not revolutionary, it's another evolutionary step," said Malcolm Penn, an analyst at Future Horizons, of Tukwila.

Memory machine

The chip industry is driven by Moore's Law, originally articulated by Intel co-founder Gordon Moore in 1965.

The industry axiom states that the number of transistors it is possible to squeeze in to a chip for a fixed cost doubles every two years.

TRANSISTORS Transistors are basic electronic switches found in silicon chips Each transistor can be switched on or off, representing a "1" or "0", known as binary code All computation is done using different combinations of these two outputs to do calculations Modern chips contain millions of transistors allowing them to execute millions of calculations per second The tiny devices consist of a source, drain and gate A voltage applied to the gate and drain turns the device on Removing the gate voltage switches it off again

In 2004, the equivalent processor to Tukwila contained 592 million of the tiny switches.

Although the new chip packs more than 2 billion transistors it operates at a relatively modest speed of 2GHz, the equivalent of many PC chips.

Last year IBM released what was described as the "world's fastest commercial chip" that operates at 4.7GHz.

The dual-core Power6 processor contains just 790 million transistors.

A large number of the transistors on the new Intel chip are used for memory.

"[It] contains lots of onboard memory and registers which are just a very efficient computer architecture to process data faster," said Mr Penn.

Cache memory holds data to be processed by the chip. The closer it is to the processor, the quicker the data can be crunched.

"It's like the difference between getting food from the fridge, rather than from the corner shop," said Mr Penn.

"The very early microprocessors had no cache memory onboard - it was all off chip - and now they have as much as they can fit on within the chip size limitation," he said. Mr Penn. "That's an ongoing trend."

Tiny technology

The chip also bucks the trend seen in many modern processors of aiming for lower power consumption.

"That's very much a reflection of the market place demands," said Justin Ratner, chief technology officer of the firm.

He said that firms that used the chips demanded more performance and were willing to trade power to get it.

"These chips go into a quite a unique market place," he said.

The firm will also show off a chip designed for ultra-mobile devices, known as Silverthorne.

The processor is based on the firms latest transistor technology which contains features just 45 nanometres (billionth of a metre) wide.

Tukwila is based on 65 nanometre technology.

"[Using 65nm technology] reflects the design time involved in that processor," Mr Ratner told BBC News.

Both chips will be shown off at the International Solid State Circuits Conference (ISSCC) in San Francisco.