June 3 (Bloomberg) -- Advanced Micro Devices Inc., trailing Intel Corp. in the market for computer processors, will ``wait and see'' before deciding whether to develop chips for the low- cost notebook market.

``I'm a little bit skeptical because of the big trade-offs and the economies of scale on the full-size notebooks,'' Patrick Moorhead, Advanced Micro's vice president of advanced marketing, said in an interview today in Taipei. Low-cost personal computers ``have a hard time doing what a lot of people would consider basic surfing'' on the Internet.

Today, Intel unveiled its Atom chip, aimed at the low-cost notebook market. Acer Inc. and Asustek Computer Inc. are among makers of products featuring the processor. Tomorrow, Advanced Micro will introduce its Puma line of chips, which Moorhead said is targeted at 85 percent of the notebook market.

The new Advanced Micro chips cut power usage and offer high- quality video capability, allowing notebook users to watch a full-length, high-definition DVD on a single battery charge, Moorhead said. The Atom isn't designed for complex tasks such as video encoding, Noury Al-Khaledy, Intel's general manager of nettop and netbook computers, said today in a briefing.

Intel expects the market for low-cost computers to increase to 100 million units per year by 2011, Al-Khaledy said. The worldwide notebook market will climb to 194 million units a year over the same period, according to researcher IDC.

Puma includes a central processor as well as a supporting chipset, which Moorhead said will be made by Taiwan Semiconductor Manufacturing Co., the world's largest custom-chip producer, using 55-nanometer technology. Transistors within chips are measured in nanometers. One nanometer is a billionth of a meter.

Advanced Micro, based in Sunnyvale, California, rose 1 cent to $6.81 at 4:03 p.m. in New York Stock Exchange composite trading. Santa Clara, California-based Intel fell 26 cents to $22.94 on the Nasdaq Stock Market.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

Last Updated: June 3, 2008 16:05 EDT