Despite the gloomy market conditions for PCs, Intel Corp. and Advanced Micro Devices Inc. are scrambling to ship new parts. Hoping to regain the performance lead in the processor race, for example, Intel on Monday is expected to roll out its fastest desktop chip to date--a 2.8-GHz version of its Pentium 4 processor line, according to sources.

Sources believe Intel is also planning to launch two other Pentium 4 chips, which run at clock speeds of 2.6- and 2.66-GHz. It is also expected to slash the prices for its 2.5- and 2.53-GHz products as well, sources said.

The moves are in response to AMD, which stunned the microprocessor giant on Wednesday. AMD bruised Intel's ego by announcing a new microprocessor--which is said to be faster than competitive chips from rival Intel.

The new chip, the Athlon XP processor 2600+, runs at clock speeds of 2.13-GHz. Intel's chips run at a faster clock rate, but AMD argues that there is a "megahertz myth" in terms of measuring the raw throughput in a processor (see Aug. 21 story ).

But the debate over processor speeds could be a moot point, given the current PC slump in the worldwide marketplace. Recently, for example, International Data Corp. (IDC) raised its worldwide PC shipment forecast in 2002 from 3% to a mere 4.7%.

IDC projects worldwide PC shipments to jump from 133.47 million units in 2001, to 139.71 million in 2002, a 4.7% growth rate. In 2001, the market fell 4.1% over 2000, according to IDC.

And based on current economic expectations, worldwide IT spending this year will reach $981 billion, an increase of only 3.7% over 2001, according to IDC. While spending on IT hardware will show a full year-on-year decrease of 4% this year, growth of spending on software and services will result in positive growth for the total IT market, according to IDC (see July 24 story ).

In 2003, the worldwide PC market looks somewhat better. The market is expected to hit 155.25 million in terms of unit shipments, an 11.1% growth rate over 2002, according to IDC.