AMD is set to announce to announce a new new processor platform called Yukon, which it hopes will cut the cost of making ultraportable laptops.

Yukon will include chips designed for small and affordable laptops that provide a full PC experience without compromising on features, the company said. The laptops will be similar in size to ultraportable laptops, but less expensive, according to AMD.

The announcement comes ahead of this week's Consumer Electronics Show (CES), where the company may reveal further details about the chips.

AMD envisions Yukon laptops delivering performance comparable to more expensive ultraportables, allowing users to run high-definition multimedia, gaming and productivity applications. Yukon-based laptops will be thin and light, with screens between 10 inches and 14 inches and prices ranging from $499 (approx £300) to $1,499 (£900), according to AMD.

"While we do see a sweet spot ... in the 11-inch to 13-inch range, our OEM partners may choose to use the Yukon platform to deliver products in different form factors targeting different spaces in the market," said Bahr Mahony, director of product marketing at AMD.

An AMD executive late last year said the premium pricing of ultraportable laptops such as the MacBook Air was a key impediment to their adoption by mainstream users. Those users don't have an appetite for expensive ultraportables, AMD has said.

AMD fits the Yukon chips in a new category it calls "ultrathin" laptops, which falls between the ultraportable and netbook laptop segments. Ultraportables are too expensive, while netbooks, though cheap, provide a limited PC experience, AMD contends.

The company has said it doesn't want to get into the low-end netbook space dominated by Intel's Atom processor, nor in the mobile space, which Intel is targeting with its Menlow platform. The low-end netbook space delivers low margins per chip, according to industry analysts, and AMD may not be able to compete there with Intel, which is the world's largest chip maker.

Hewlett-Packard will offer Yukon chips in the Pavilion dv2 laptop, for which pricing was not immediately available. AMD didn't comment on whether other PC makers were planning to offer Yukon-based laptops.

The platform includes the Neo processor, which runs at 1.6GHz, the M690T chipset and ATI Radeon graphics controllers. It supports as much as 1GB of RAM. Yukon-based laptops can run Microsoft's Windows Vista OS.

AMD declined to comment on pricing or availability of the Yukon platform or Neo chip.

The chips should better position AMD against Intel, which offers specially designed low-power chips being used in ultraportable laptops including the MacBook Air, Lenovo's X300, Fujitsu's LifeBook P8020 and Hewlett-Packard's EliteBook 2530p. Intel also develops the Atom processor for netbooks.