Intel's smallest chip to ride portable PC wave

TAIPEI (Reuters) - Intel Corp said the market for smaller, low-cost personal computers, some of which can fit in one's pocket, could be as big as $10 billion, driven by demand from emerging and matured markets.

The world's largest semiconductor maker has launched its smallest ever processors -- the Atom range -- to power what it calls mobile Internet devices, as well as ultra-small PCs, called Netbooks and Nettops.

"It's a 10 billion dollar opportunity over some period of time," Sean Maloney, General Manager of Intel's sales and marketing group, told Reuters in an interview at the Computex PC fair in Taipei.

"It's a big opportunity for Intel and it's a big opportunity for Taiwan manufacturers," Maloney said.

Late last year, Taiwan's Asustek Computer Inc launched its 7-inch Eee PC costing around $500 with Intel's chips built in, and the Taiwan firm aims to double sales of the popular low-cost laptops next year to 10 million.

Asustek's rival Acer Inc is also displaying tiny, low-cost PCs at Computex, which allow users to download video and music to flash memory and surf the Internet via a wireless connection.

"Its just starting, but it appears to be a pretty successful start," said Maloney.

"We think that we are very comfortable with what we have done," he said. "We are comfortable with the products."

Intel, whose processors are found in four out of five personal computers sold around the world, said in a separate statement that it will launch in mid-July processors and some chipsets for its next-generation mobile PC platform called Intel Centrino 2 processor technology - formerly codenamed Montevina - for high-performance laptops.

Intel's full line of chipsets and its Wi-Fi wireless product will ship in early August.

Meanwhile, the company aims to enable initial availability of certain WiMAX-enabled notebook PCs in the United States later this year, depending on individual computer maker plans and the availability of WiMAX, a super high-speed wireless technology.

"People appear to have a strong desire for notebooks," Maloney said.

Intel gave no forecasts, while research firm IDC predicts that global shipments of notebook computers will grow 26 percent to reach 138.6 million units in 2008, outpacing an annual 4 percent growth for desktop PC shipments.

In April, Intel stuck by its profit-margin target for 2008, reassuring investors concerned about falling memory chip prices and the impact of a weak U.S. economy.

"So far people have been talking about slowdown for ten months, since last August but so far the industry has done reasonably well," Maloney said.

(Editing by Louise Heavens)