Speculation has hinted that the new chip will prove to be more powerful and faster than current processors offered by Intel and AMD.

The new microprocessor will be marketed at the digital home industry as an ideal technology for home entertainment devices and computers, and will appear in Sony and Toshiba’s high-definition TVs, Sony home server for broadband content and its upcoming PlayStation 3.

The Cell technology is expected to perform various tasks at once, and the companies are optimistic that this will enhance the quality of video delivered over the internet and increase the conformity of computer games. Sony has also stated that the microprocessor could reconcile films and video games by importing the special effects and graphics designed for films into video games.

IBM said it would start producing the chip in early 2005 at manufacturing plants in the US. The first machines off the line using the Cell processor will be computer workstations and servers.

Intel and AMD are already believed to be developing alternative multi-tasking methods in response to the arrival of Cell. Intel has announced the release of its virtualisation technology, Vanderpool, which aims to split a microprocessor into virtual processors in an attempt to perform different tasks across a network from a central location.