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The chip maker is evaluating its options for introducing Pentium III chips running faster than 1GHz in the second half of this year.

The new chips, if introduced, would raise performance of mainstream PCs while keeping Intel competitive with rival Advanced Micro Devices Inc. (NYSE: AMD)

The motivation to raise performance comes, in part, because of the available "headroom" on the chip. But analysts said it will also come out of necessity, due to competition with AMD and demand from its PC-maker customers.

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