By this time next year, the line between netbooks, UMPCs, handhelds, palmtops, netblets, MIDs, and whichever other portable internet doodads you can think of might get all the more blurry with Intel’s 32-nanometer “Medfield” Atom chip. The current “Diamondville” chip is 45 nanometers, which is already pretty small.

The Medfield chip is thought to be aimed more at the handheld market than the netbook market. Intel will apparently be pairing Medfield CPUs with a graphics chipset called PowerVR, which is currently used for ARM-based devices and is specialized to consume minimal power. That’s not to say that this same setup won’t be found in future netbooks as well, but it does point at a potential move by Intel into smaller and smaller device categories.

[via Reg Hardware]