Intel, which has been engaged in a battle royal with Advanced Micro Devices over whose chips go in high-end servers, is beginning to encounter a similar level of competition from a smaller rival at the other end of the scale.

VIA, based in Taiwan, is often forgotten as a player in the dominant "x86" market for PC microprocessors. It has never had more than 5 per cent market-share and is normally in the 1 to 2 per cent range, with Intel taking around 80 per cent and AMD the rest.

However, it seems to be a match for Intel in the niche segment largely ignored by AMD for low-powered computing.

Samsung has tried both VIA and Intel microprocessors in its Q1 ultra-mobile PC.  VIA is preferred in the 02 by  Silicon Valley’s OQO, which pioneered the category. A VIA processor is also powering the Everex CloudBook, which created a stir at the Consumer Electronics Show this month.

Intel is pushing a new category called Mobile Internet Devices or Mids and is expected to become more competitive when it introduces its low-power Silverthorne chip. More details of its capabilities are expected next month.

This week, VIA announced its next-generation Isaiah architecture, which it believes will keep it ahead of Intel, even after Silverthorne appears in the second quarter.

While Intel has switched from increasing speeds to decreasing power demands in its chip designs, VIA is going the other way.

Its strength has always been the extended battery life it permits through the low wattage of its microprocessors. With Isaiah, it says the power demands will be the same, but the Isaiah chip will perform two to four times better than its predecessor.

"Our chips are the best in the market for performance per watt, but the level of performance we can achieve with Isaiah means we can be more competitive in other segments," says Glenn Henry, president of Centaur Technology, a VIA subsidiary that designed the chip.

The performance boost could even make VIA a competitor for the microprocessor slot in full-sized PCs, he says, a move that would certainly get the attention of both Intel and AMD.