Two months after Intel (NSDQ: INTC) formally unveiled its Atom line of chips at its developer event in Shanghai, its been pounding away at promoting gadgets it’s dubbed MIDs, or mobile internet devices. These devices, smaller than a laptop, but larger than a mobile phone, forgo voice and concentrate on delivering mobile content and is Intel’s big hope for getting back into the wireless chip market after selling off its first attempt, its Xscale mobile processor business to Marvell Technology Group two years ago.

But other chipmakers are now rushing to give Intel a little competition, including Qualcomm (NSDQ: QCOM), Texas Instruments, Samsung, among others. Intel’s newest rival is Nvidia, which the WSJ reports will announce today its first chips for MIDs, the Tegra.

The company claims devices built using the Tegra processors can play 26 hours of high defintion video before their batteries need to be recharged. Intel’s Atom chip meanwhile, can be used for 4-6 hours before it needs recharging. The PC chip giant is already working on the second generation of Atom chips, and says that by 2010 they will have one that draws a fraction of the power, which will improve battery life. Intel also believes that its PC experience will help differentiate its Atom chips—it has repeatedly said that its processors offer a better internet surfing experience, as much of the web’s software was written for its chips long before it was adapted for ARM’s, resulting in a “second-rate” browsing experience for those using devices based on ARM’s technology.

Intel Atom chip, meanwhile, has already been selected for “about 30” MIDs. Texas Instruments reports its chip has been chosen for 40 MIDs and smartphones, while Qualcomm said its competing chip has been selected for 15 MIDs.

Tricia adds: In story today in the Financial Times, Intel’s CEO Paul Otellini talks about adding the Atom chip to mobile phones. With more devices being Internet-focused, he said “my view is that it’s easier to add voice to a small computer than vice-versa.” This will be Intel’s second try at entering the mobile phone market after it failed and had to sell its mobile-phone division to Marvell in 2006. He said that Atom chip can address four markets, all worth $10 billion by 2010 or 2011. The four markets are: MIDs, consumer electronics, such as TVs, ultra low-cost PCs, and in a wide range of other products.

• Intel Backing Mobile Internet Devices (MIDs) To Get Back Into The Wireless Game