Intel is to invest $1 billion to gear itself up for the mass-production of chips using the recently-announced 45nm process. The money will be used to re-tool its existing plant in Rio Rancho, New Mexico, named Fab 11X.

The factory will be the fourth Intel site to be able to manufacture chips using the next-generation technology. Production in New Mexico is scheduled to start in the second half of next year.

"Our new 45 nanometer process represents one of the most significant manufacturing breakthroughs in decades, and we believe that putting it in our factory in New Mexico will help us deliver the best possible products for our customers," said Intel chief Paul Otellini.

"Our Rio Rancho site has successfully operated in New Mexico for 27 years. Based on that success, we are pleased to position Fab 11X for Intel's next generation of technology."

When announced last month, Intel hailed its latest manufacturing process as the biggest change to chips in 40 years. The new 45nm process ensures that quad and octo-core processing can become a reality on chips that are power and heat efficient.

The chip giant has said it is using "dramatically new materials" to build the insulating walls and switching gates for the new processors.

Fab 11X currently manufactures 90nm computer chips on 300mm wafers. The initial production of Intel's 45nm silicon will be done at its Oregon development fabrication plant, called D1D.