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SUNNYVALE, Calif., Nov 9 (Reuters) – Advanced Micro Devices Inc (NYSE:AMD) has begun shipping its first "Fusion" microprocessors for low-end laptops, launching a product line it hopes will help it regain ground lost to larger rival Intel Corp (NASDAQ:INTC).

The new "Ontario" processors, which combine a graphics processor and central processing on a single chip, started shipping this week, executives said on Tuesday.

"You’ll see us ramp steeply that production and see systems from our customers in the marketplace starting in the January timeframe," Chief Executive Dirk Meyer told analysts.

Moving in a similar direction, Intel is also planning to launch a central processor with integrated graphics processing.

Graphics and central processors are usually separate pieces inside of computers but AMD says combining them on a single chip improves performance.

AMD, a perennial runner-up to Intel in the global microprocessor market, also forecast a 2011 gross margin of 44 to 48 percent, broadly in line with previous quarters and Wall Street’s average expectation for just above 45 percent.

AMD is betting the first of its new Fusion chip family will help it gain market share in laptops, an area dominated by Intel.

"We want our fair share of notebooks. We’re not close to our fair share," senior vice president Rick Bergman told Reuters.

AMD declined to say how much it would sell the Ontario chips for, but Bergman said they would typically be used in PCs selling for between $300 and $600.

Most of AMD’s sales are dependent on consumers, rather than corporate buying, a segment that has been slammed by weak demand. The company’s shares lost 2.8 percent on Tuesday to $7.91. (Reporting by Noel Randewich, editing by Gerald E. McCormick and Tim Dobbyn)