Intel has launched what it believes are the world's smallest processors, dubbed the Atom.

The x86 processors, formally codenamed Silverthorne and Diamondville, have been designed on new microarchitecture designed for low-power (MIDs) and and use10 times less power than its Celeron M chip.

They are built on Intel's 45nm process and have a thermal design power (TDP) specification in 0.6-2.5 watt range, (the Core 2 Duo has an output of 35 watts) and scale to 1.8GHz.

The launch, set for second quarter, will tighten competition between Intel and its United Kingdom rival ARM Limited which specializes in designing processors for MIDs, including the Apple iPod and iPhone, Nintendo game consoles, and mobile phones manufactured by Nokia, Samsung and Sony Ericsson.

Intel's MIDs will operate on it's Menlow platform and run an embedded Linux platform such as Unbuntu's Mobile and Embedded Edition, launched late last year, or those under the . Intel will trial China's Red Flag Linux on its MIDs in May.

Intel system software division vice president Doug Fisher said the market will welcome Linux-based MIDs.

"The emerging MID category represents significant growth opportunity for Intel and the industry. The demand for Linux on these devices is increasing," Fisher said.

Intel executive vice president Sean Maloney said the chip can be used in MIDs such as "netbooks" and "nettops", and in embedded applications and thin clients.

"This is our smallest processor built with the world's smallest transistors [and] is a fundamental new shift in design," Maloney said. The Atom processor includes a low-power companion chip with integrated graphics and a wireless radio.

It's successor, Moorestone, will be released in 2010 and is touted as being a further 10 times more power efficient than the Atom processor.

ARM currently uses its ARM11 processors in MIDs and will release its successor, Cortex A8, this year. The Cortex A9 is scheduled for release by 2010 and is claimed to have four times the performance of ARM11.