Intel Corp. will begin shipments of its Celeron D processors based on the code-named Cedar Mill core, which will allow the world’s largest supplier of x86 chips to increase performance of its low-cost chips by increasing cache size and clock-speed potential for the products.

Santa Clara, California-based Intel will unveil its Intel Celeron D processors 352 and 356 that will operate at 3.20GHz and 3.33GHz respectively and will employ 512KB of level two cache on the 28^th of May, 2006, according to a news-story published by HKEPC web-site. Current Intel Celeron D chips integrate 256KB of L2 cache and operate using 533MHz processor system bus. In the third quarter of the year Intel will increase clock-speed of the Celeron D to 3.46GHz with the Celeron D model 360.

The main advantage of 65nm process technology is lower manufacturing cost, something which may allow Intel to reduce pricing on Intel Celeron D processors more aggressively while pushing the speeds of the mentioned products up. Potentially, low-cost Intel Celeron D chips pose threat to sales of AMD Sempron processors.

The first two value Celeron D chips with 512KB of cache will not be really inexpensive: $79 and $89 for models 352 and 356, respectively, or about $10 higher when compared to chips clocked at the same frequency, but with 256KB cache. The Celeron D 360 is projected to cost even more: $103.

The new processors will be available for LGA775 infrastructure, but it is uncertain whether similar chips will be sold for previous-generation mPGA478 form-factor mainboards. Thermal characteristics of the new chips are also uncertain.

Intel Corp. did not comment on the news-story.