Nvidia ( NVDA) may develop an integrated x86-based chip for use in low-cost computers, a move that would step up its rivalry with Intel ( INTC), according to published reports.

Nvidia is considering developing an integrated chip based on the x86 architecture for use in devices such as netbooks and mobile Internet devices, said Michael Hara, vice president of investor relations at Nvidia, during a speech that was webcast from the Morgan Stanley Technology Conference, according to a story from IDG News Service on the PC World Web site.

Nvidia already has developed an integrated chip called Tegra, aimed at small devices such as smartphones and MIDs and will start shipping in the second half of the year.

"Tegra, by any definition, is a complete computer-on-chip, and the requirements of that market are such that you have to be very low-power and very small, but highly efficient," Hara was quoted as saying. "Someday it's going to make sense to take the same approach in the x86 market as well."

The report said Hara didn't discuss specific plans but said such a move might make sense in two to three years. He also didn't say if Nvidia would develop the x86 chip itself or license it from another company. A company spokesman said Nvidia is considering all its options and has reached no firm decision yet.

Intel's x86-based Atom processor is most widely used for netbooks. Besides Intel, only Advanced Micro Devices ( AMD) and Via Technologies currently make x86 chips, according to the Wall Street Journal.