Intel Atom supply squeezed

Intel reports better-than-expected demand for Diamondville and says it is "moving quickly" to increase output, as PC OEM Asustek Computing notes a shortage of the Atom chips.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 5/2/2008

OEMs may have trouble getting their hands on Intel Corp’s upcoming Atom chip through Q3.

Specifically, Intel has reported better-than-expected demand for Diamondville Atom chips, which are shipping to customers now and awaiting formal launch by the chip maker. 

Diamondville targets ultra-low-end, inexpensive PCs, which Intel has dubbed “netbooks” and “nettops.” Intel’s Silverthorne Atom, which targets mobile Internet devices (MID), launched in April after the company branded the Atom family in March.

“We are seeing better-than-anticipated demand and we are moving quickly to increase our output,” Bill Calder, an Intel spokesman, told Electronic News.

Calder noted that Intel’s 45-nm metal-gate manufacturing process, coupled with the very small Atom die size, means the company “can increase output fairly quickly. We can put over 2,500 of these die on a single wafer,” he said.

Calder would not quantify the increased output, nor would he state more specifically than “millions of units” how many Atom chips Intel plans to ship this year.

The supply squeeze may be forced by the increasing trend toward low-end, ultraportable laptops and is being noted by such PC OEMs as Asustek Computing Inc. Company CEO Jerry Shen said on the Taiwan-based PC maker’s Q1 financial call this week that he expects a shortage of the Atom chips through the current quarter.

Asustek plans to launch an Atom-based version of its popular Eee PC (photo, right) at Computex in June. Asustek’s current Eee PC 900, which uses Celeron chips, will continue to be available at that point. "Unlike our competitors, we use both Intel Atom processors and Celeron M processors,” Shen said on the call, “so this will give us a stronger advantage in guaranteeing shipments.” Since Asustek’s Eee launch, the company has sold more than 1 million of the PCs.

Other low-cost Atom-based PCs are expected from Dell and Hewlett-Packard in the coming quarters. Intel has also stated that it will base its future sub-$350 Classmate PCs on the Atom. Classmate competes with the XO laptop from the One Laptop Per Child (OLPC) association. Intel resigned from OLPC earlier this year.