NEW YORK ( TheStreet) -- Back in January, the Information Network questioned whether Intel's (INTC - Get Report) slashed revenue of about $1 billion for the fourth quarter of 2008 was because of its misjudging the success of the netbook and its Atom processor.
According to its argument, Intel manufactured $29 Atom processors slated for a burgeoning netbook market, instead of profitable Penryns priced at $279 and used in notebooks.
The thesis presented by the Information Network was that at a price difference of $250 a processor between the Penryn and Atom, Intel lost $1.14 billion in revenue in 2008 by making the cheaper Atom processors because of contractual obligations with netbook manufacturers.
According to the analysis, a total of 2,436 Atoms can be made on one 300mm wafer for a total selling price of $70,600 per wafer, neglecting edge losses and yields for this quick calculation.In contrast, a total of 660 Penryns can be made on one 300m wafer for a total selling price of $184,100 per wafer. This week, Intel announced that the new N450 Atom is 60% smaller and 20% more efficient than its predecessor. That translates to 4,060 Atoms made on one 300mm silicon wafer. At a selling price of $64 per Atom, the total selling price per wafer of $259,800 is more than the Penryn chip for the notebook market. According to a report from the Information Network, 31.1 million netbooks are forecast to be made in 2010. The report also notes that Intel will exhibit an 80% share of the netbook market, competing against Arm Holdings (ARMH). Neglecting volume discounts to netbook manufacturers, Intel stands to make $1.6 billion on the Atom for just netbooks.