The new chips will be ready for later this year

Intel said it had taken the decision for environmental reasons.

The plans involve microprocessors and chip sets, which handle the flow of data between the processor and the rest of a computer.

"Lead-free is required for the future. This is the right time for this launch of the technology," said Michael Garner of Intel.

Lead-free trend

E-waste is a mounting problem, with growing concerns that discarded computers end up in developing countries to be dismantled in ways that are damaging to the environment and to the health of the workers who take them apart

HAZARDOUS WASTE 1: Lead in cathode ray tube and solder 2: Arsenic in older cathode ray tubes 5: Antimony trioxide as flame retardant 4: Polybrominated flame retardants in plastic casings, cables and circuit boards 3: Selenium in circuit boards as power supply rectifier 6: Cadmium in circuit boards and semiconductors 7: Chromium in steel as corrosion protection 8: Cobalt in steel for structure and magnetivity 9: Mercury in switches and housing

And tighter regulations on toxic substances used in electronic products are forcing manufacturers like Intel to look for cleaner materials.

A European Union directive requires companies to stop using six hazardous materials, including lead, after July 2006.

Intel is following in the footsteps of other manufacturers such as Japan's NEC in switching to lead-free components.

The chip giant is planning to reduce the amount of lead in its products by 95% starting later this year.

Lead has been used for more than a century in electrical devices, but its effects on health have prompted efforts to find a safer and reliable replacement.

The environmental pressure group, the Silicon Valley Toxics Coalition welcomed Intel's decision but said more needed to be done.

"There are over 1,000 chemicals that go into making a computer and many of them are hazardous," said Sheila Davis, of the group's Clean Computer Campaign.

"We don't know what the overall impact of all those chemicals is on the environment."