AMD originally designed Neo for products like ultrathin laptops, thin and light laptops that can deliver full functionality at affordable prices. However the chip designer is now expanding the chip's use to all-in-one PCs and nettops, which are small, low-cost desktop PCs the size of a hardcover book. Intel offers Atom processors that are already being used in similar systems.

The main target for the Neo chips remains ultrathin laptops, but some PC makers are putting the processors in nettops and all-in-ones, said Bob Grim, director of client marketing for AMD. Neo chips are on motherboards, so they are small enough to incorporate in desktops that draw less power.

"We've known all along that this type of technology would really work well in multiple platforms and multiple types of form factors," Grim said. The first products later this year with Neo chips could be all-in-one PCs, which incorporate a CPU, motherboard and monitor in one box to which the mouse and keyboard are attached.

Desktop users demand better performance and graphics compared to laptop users, Grim said. Desktops with Neo chips will allow users to watch full high-definition movies and play graphics-intensive games like World of Warcraft and Quake, Grim said.

"These CPUs perform better than the Atom processor, and the graphics are superior. These things ... can play Blu-rays, they can play games," Grim said.