San Francisco (CA) – Intel has its first working 32 nm desktop and mobile processors at hand and demonstrated them to the press during a briefing in San Francisco today. As a Nehalem shrink, the Westmere product family does not represent a new micro-architecture, but there are plenty of new features to consider them a substantial upgrade over the current product generation, which has not even seen a full roll-out yet.

The Westmere launch feels somewhat strange. Nehalem is not quite available yet, at least not as available as we would expect it from a processor family, as mobile and server products are still missing and the majority of Intel’s product lineup is still made up of Core 2 CPUs. Nehalem will see more products by mid-2009 and the second half of the year, while its 32 nm shrink Westmere is on track for a Q4 2009 launch.

According to Intel, Westmere will launch with six and two cores (Gulftown 6C and Clarkdale 2C), while there will Arrandale will target the mobile segment with two cores. What makes Clarkdale and Arrandale special is the fact that they integrate a 2-channel DDR3 memory controller and are Intel’s first processors with on-die graphics supporting switchable integrated/discrete graphics. Some readers may remember that this idea was first pitched by AMD back in April of 2006 for the Fusion processor that was slated for a 2009 release back then. However, AMD recently canceled the 45 nm Fusion with Shrike core and replaced with the 32 nm Llano processor that is now planned for a 2011 launch.

Clarkdale will also be used for volume servers. All Westmere processor will be equipped with virtual multi-threading, which enables them to run two threads per virtual core – and a maximum total of 12 threads in the case of the Gulftown processor.

Westmere processors will also include Intel’s new AES instruction set, which the company says is a similar upgrade than the addition of SSE 4.1 in 45 nm Penryn processors and deliver seven new instructions for accelerating encryption and decryption of data. The new CPUs will be compatible with Intel’s 5-series of chipsets that are expected to be released in the second half of this year.

Westmere processors are prepared for production at Intel’s D1D fab in Oregon, followed by D1C (Oregon) in the fourth quarter, Fab 32 (Arizona) and Fab 11X (New Mexico) in 2010.