Intel Corp on Monday introduced a new microprocessor and chipset destined to compete in the value ultra-thin sub-notebook market created by rival firm AMD.

The new processor, officially called the Pentium SU2700, comes amid investor fear that feature creep in the wildly popular netbook class of sub-notebooks is quickly cannibalizing the sales of higher-margin products with more epxensive Intel CPUs.

The new Intel Pentium SU2700 will harness a 45nm process node for two processing cores at 1.3GHz inside a 10W thermal envelope.

Meanwhile, the Pentium SU2700 will be married to the Intel GS40 Express chipset which will offer MPEG4/H.264 acceleration, integrated HDMI output, and acceleration for Windows Vista’s Aero interface.

More details and a hard product launch are expected in the second half of 2009.