HP is reportedly in talks with Intel regarding the restrictions in place on the Atom processor.

The Atom is used in most netbooks on the market, however it is only available for use in netbooks with up to 10.2-inch displays. According to Digitimes, HP is said to be in negotiations with Intel reportedly in hopes to use Intel’s Atom in new mini-note PC models with larger panels.

The news comes at the same time as rumors about an Atom competitor from VIA. The VIA C7-M processor is currently used in HP’s 2133 Mini-Note, which was launched before the copious amounts of Atom netbooks hit shelves.

Digitimes cites sources who say that, in light of competition from netbooks by Asus and Acer, HP's '09 roadmap shows the company hopes to add both 11.6-inch model and a 13.3-inch model to its netbook line. The 11.6-inch is expected in the second quarter of 2009 and the 13.3-inch in June 2009.

We’re all in favor of HP basing its next line of mini-notes on the Atom, but is a 13.3-inch really a netbook? We don’t think Intel will go the for it. However, while we think only the 11.6-inch has a shot, Digitimes sources think HP is likely to obtain consent from Intel. Watch this space for more. Intel is expected to make a decision at the end of January.

Read the full story on Digitimes.