AMD introduced a Neo line of chips with a single core in January, and in May added dual-core versions. The chips are only available in Hewlett-Packard's DV2Z ultrathin laptop, with laptops from other PC makers due in September. The dual-core chips run at 1.6GHz and include between 512KB and 1MB of L2 cache. The Neo chips come with a platform that AMD plans to upgrade to improve performance and graphics.

AMD's Neo platform may hold an advantage over Intel's Atom platform when it comes to graphics capabilities due to a more advanced graphics core, said Dean McCarron, principal analyst at Mercury Research. But Intel plans to move the graphics core from the chipset into the Atom chip in the future, which could improve overall graphics capabilities.

PC makers -- like Acer -- are also experimenting with Nvidia's Ion platform, which couples the Atom processor with Nvidia's advanced graphics core, allowing users to view high-definition movies on Intel-based nettops.

Intel did not immediately respond to a request for comment.

But desktops based on Intel's Atom and AMD's Neo chips serve different audiences, McCarron said. Atom-based nettops, for example, are meant to be low-power Internet appliances, while AMD-based nettops would draw more power but offer better performance and graphics. With that in mind, AMD has to worry about Neo cannibalizing the sales of its mainstream Sempron and Athlon chips, he said.