Intel's Atom Chip Faces Supply Squeeze

04/30/08 - 06:44 PM EDT

Alexei Oreskovic

SAN FRANCISCO - The newest member of Intel's(INTC Quote) chip family, the low-cost Atom processor, hasn't begun shipping, yet there may not be enough of them.

Computer makers, who want Intel's new microprocessor for a nascent breed of low-cost, extra-small notebooks, are predicting that there won't be enough Atom processors to go around when it becomes available later this year.

"We will see a severe shortage in Atom processors that will last well into the third quarter," said Asustek CEO Jerry Shen during a conference call discussing the Taiwanese firm's first-quarter financial results, according to news reports.

Asustek has been at the forefront of the new market for low-cost notebooks with its Eee PC, a stripped-down device that's half the size of traditional notebook PCs and can cost as little as $299.

Asustek expects Eee PC shipments to surge 70% to 80% in the current quarter, according to the Financial Times. And a slew of other companies, including Hewlett-Packard(HPQ Quote), Dell(DELL Quote) and Acer, have released similar low-cost notebooks, or plan to in the coming months.

The current crop of ultramobile PCs rely on an assortment of microprocessors, ranging from older-generation Intel chips to chips from Taiwan's Via Technologies. With Atom, the PC makers will have a chip built with Intel's most advanced manufacturing processes and specially designed for energy-efficiency and for use in low-cost devices.

The reports of strong demand could bode well for Intel, which has said it expects the Atom to triple the size of the potential market.

< Previous
1 2
Your Recent Quotes: Quote Up0 | Quote Down0
 
Dow S&P 500 NASDAQ
Oil*
65.43
8,280.74
896.42
1,796.52
10 Yr
3.50%
223.32
26.91
49.20
-2.63%
-2.91%
-2.67%
Data delayed 20 min
Get Jim Cramer's Free Newsletter

The Daily Booyah!
Get your daily dose of Cramer in your inbox.
Submit
We respect your privacy.

Premium Stock Ideas
Access Action Alerts Plus to find out Cramer's latest picks now!

Brokerage Partners