Intel's upcoming next-generation laptop chips will have a dozen new features to improve graphics performance and will be able to play Blu-ray 3D movies, the company has announced.

Laptops with processors based on the Sandy Bridge architecture will play Blu-ray 3D movies while preserving battery life, said Nick Knupffer, an Intel spokesman. Users won't need to buy a separate graphics processor to specifically view 3D content.

Sandy Bridge chips are due to go into production later this year, Knupffer said. Company officials have said that PCs with the new chips could hit store shelves in the first half of next year.

The company is expected to shed more light on Sandy Bridge's graphics performance at the upcoming Intel Developer Forum in San Francisco, Sept. 13-15.

Intel's graphics improvements come from higher levels of integration and the addition of specialised accelerators to decode video, analysts said.

Intel for the first time will integrate the CPU and graphics processor on a single chip, said Nathan Brookwood, principal analyst at Insight 64. The current generation of chips based on the Westmere architecture have the CPU and graphics core on one piece of silicon, but as separate units.

The higher levels of integration will also help Intel cram in more transistors to improve graphics performance, Brookwood said. The Sandy Bridge CPUs and GPUs will be made using the 32-nanometre process, while with current chips, the CPU and GPU are made using the 32-nm process and the 45-nm process, respectively.

Graphics performance typically doubles from one chip generation to the next, said Dean McCarron, principal analyst at Mercury Research.

Intel's current laptop chips are capable of 1080p video, and improvements in Sandy Bridge chips could bring a noticeable graphics improvement to PCs, McCarron said.

Intel's chips go into more than 80 percent of the world's computers and the company is widely recognised for its CPU design, but lags behind AMD in graphics. AMD later this year will release a family of chips called Fusion that integrate the CPU and GPU in a single chip. The first Fusion chip, code-named Ontario, will go into netbooks and ultraportable laptops. The next wave of Fusion chips for laptops and desktops will be released next year. AMD has already said Fusion will allow users to view Blu-ray movies and play 3D games.

However, Intel's improvement in integrated graphics will not affect the discrete graphics market, McCarron said. There is a growing interest in switchable graphics, in which laptops have both integrated and discrete graphics, McCarron said. That allows users to switch between them depending on the application they're using.

More laptops are shipping with both graphics processors - up to 45 percent of the laptops worldwide in the second quarter, McCarron said.

"Irony here is that each graphics solution - whether it's Intel integrated or discrete - is succeeding on its merits," McCarron said. "It's not like you're picking one or another."

The sudden ramp-up in adoption of discrete graphics cards in laptops came at the start of this year, when Intel released its new Core family of processors, McCarron said. Users were perhaps unhappy with the integrated graphics performance of Core chips, which is why they bought discrete graphics cards.