Intel Corp has resumed share buybacks after a pause of more than a year and its chips have been chosen for 35 tablet computers as well as some smartphones, its chief executive said on Wednesday.

The company is betting that new chips due to ship next year will invigorate its mobile business, which has struggled to get off the ground amid explosive sales of Apple's iPad tablets and smartphones using Google's Android operating system.

Stock in the world's largest maker of microprocessors rose 1.4 percent at midday in a mostly flat market.

The consumer (tablet) products will roll out over the first half of next year, CEO Paul Otellini told analysts at a conference. He added that the tablets would run on Google's Android operating system as well as Microsoft platforms and Meego, a project between Intel and Nokia.

He also said Intel recently resumed share buybacks after pausing a year and a half ago due to concerns about the economy.

I'm happy to report that Intel has been back in the market this quarter, Otellini said. The buyback has resumed.

In November, Intel said it was boosting its quarterly dividend by 15 percent, a move seen as a sign of confidence that the world's largest chipmaker is growing, even as the U.S. economy remains sluggish.

A resumption of Intel's share repurchases amplifies that signal, said Craig Ellis, an analyst at Caris and Company. Shareholders will look at that and say management is putting their money where their mouth is, he said.

Intel authorized $5.7 billion for stock repurchases at the beginning of the year. Otellini did not say how many shares Intel has recently bought.

MARATHON, NOT SPRINT

Intel has had few big successes with processors in the fast-growing smartphone and tablet niches, with power-efficient chips based on ARM architecture dominating the market so far.

Otellini called Intel's pursuit of the smartphone market a marathon, not a sprint, adding that the company's second-generation Medfield chip is now being sampled by customers and should ship next year and in 2012.

You will see smartphones from premier branded vendors in the second half of 2011 with Intel silicon inside them, Otellini said.

Intel has already started shipping its new Sandy Bridge chips, which are expected to be in notebooks on store shares early in 2011.

The Sandy Bridge microchips, Intel's newest PC chips, include graphics processing capability that the company says is equivalent to low-end discrete graphics processors.

Intel would like Sandy Bridge to make some discrete graphics chips unnecessary, but graphics chip designer Nvidia Corp this week told Reuters it won 200 design wins for 2011 notebooks that also use Sandy Bridge processors. Nvidia won about 125 notebook design for 2010.

(Reporting by Noel Randewich; editing by Andre Grenon and Derek Caney)

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