SAN FRANCISCO (Bloomberg) — Intel Corp., the world's biggest maker of semiconductors, will demonstrate technology that shrinks the components of chips, helping maintain the company's lead over rivals such as Advanced Micro Devices Inc.

Intel plans to show off a prototype memory chip made on so-called 32-nanometer equipment, said Sanjay Natarajan, a director of technology development. That means the lines etched into the chip's circuits are just 32 nanometers wide. A piece of paper is about 100,000 nanometers thick. Shrinking the circuit lines allows manufacturers to make more chips from one piece of silicon while improving the performance of their products — the key components in everything from supercomputers to music players. AMD, the second-biggest maker of personal-computer processors, is just now moving to 45-nanometer technology, Intel's current chipmaking standard.

"We do have a track record of talking about new processes and then putting them into high volume on a very disciplined treadmill," Natarajan said.

The first chips created with Intel's new technique will go on sale in the fourth quarter of next year, Natarajan said. Plants will produce about 100 million microprocessors this year using the 45-nanometer standard, he said.

In 2006, Intel chief executive officer Paul Otellini adopted the policy of switching production to a new manufacturing standard every two years. The decision came after Intel fell behind Sunnyvale, California-based AMD in the introduction of some types of technology.