Intel, ignoring negative sales forecasts, launched the industry's first two-gigahertz processor in Hong Kong and Beijing yesterday. The semiconductor giant predicted its latest Pentium 4 chip would go mainstream quicker than many people expected and the company was headed for another milestone in 2007 when it would unveil a 20 GHz processor. 'This is a celebration,' said Christian Morales, Intel vice-president and general manager for Asia-Pacific operations. 'We will try to beat the analysts' estimates for PC sales.' He said the semiconductor industry took 20 years to break the 1 GHz barrier for PC processing speed. 'It took us a year to reach 2 GHz, which opens up the future to even higher speeds and better performing processors that meet evolving user requirements,' he said. However, recent forecasts by analysts pointed to a more disappointing scenario in the semiconductor and PC sectors. Gartner analyst Dorothy Lai said: 'I don't know about Intel's estimates, but the economic downturn continues to drag down PC and chip sales worldwide.' Gartner's Dataquest unit recently reported worldwide PC shipments in the second quarter of this year reached 30.4 million units, down 1.9 per cent from the same period last year. It was the first time since 1986 the global PC market posted negative growth. Dataquest projected worldwide semiconductor revenue to decline 26 per cent to US$168.1 billion this year from US$226 billion last year. Based on reports from some of the larger companies involved in PCs, storage and communications, Dataquest predicted the second half of this year would be dismal for the semiconductor industry. Although the seasonal demand cycle for PCs and cellular handsets had not kicked in, and there was still too much inventory on shelves, there were signs of hope. Dataquest said there were indications from the Asia-Pacific that orders from American and European companies for motherboards, notebooks and mobile phones were increasing. Mr Morales said: 'The rapid ramping of technology and industry support for the Pentium 4 processor reflect the strength of the underlying architecture and the headroom it provides for the demands of new and evolving usage models. The combination of Intel processor and platform technologies, and industry innovation provides the foundation for the next decade of desktop computing.' Intel and more than 40 software vendors and computer manufacturers demonstrated a range of new applications and products optimised for the 2 GHz Pentium 4 processor. The company said Intel products, including the high-performance 850 chipset and the upcoming low-cost 845 chipset, would help step up mainstream demand for Pentium 4 processor-based systems. The chipsets should enable PC makers to offer a variety of Pentium 4 processor-based systems, ranging from high-end configurations to systems under US$1,000. Mr Morales said the Hong Kong market was an example of a growth area for Pentium 4 PCs based on the aggressive bundling promotions being delivered by broadband network operators and their partner PC vendors. 'We see this same bundling strategy being rolled out by other Asian service providers and it will drive initial demand for 2 GHz Pentium 4-based systems in the next few months,' Mr Morales said. Dataquest predicted the Asia-Pacific, excluding Japan, would have 37.8 million broadband Internet subscribers by 2005. Last year, the region had 6.1 million subscribers accessing the Internet through broadband connections. By the end of this year, the number of subscribers would nearly double to 11.4 million. Andrew Chetham, senior analyst for Gartner's Asia-Pacific telecommunications and networking group, said: 'The tremendous growth initially experienced in South Korea is now beginning to be seen in markets such as Taiwan and Hong Kong. We expect other developed markets such as Singapore and Australia, which made a slow start, to begin making up ground in the next 18 months.' Mr Morales said demand for broadband connections on the mainland was expected to flourish in the next few years and this development would spur increased adoption of Pentium 4-based systems across the country. 'China is already our biggest market for Pentium 4-based systems starting from 1.4 GHz. Soon, the 1.8 GHz Pentium 4 chip will be the mainstream processing unit on PCs,' he said.