View this article at: http://www.electronista.com/articles/08/09/01/intel.atom.supply.problems/
Monday, Sep 01, 2008 7:20pm
Intel still not meeting demand for Atom chips
Intel is facing difficulties meeting the demand for its Atom processors, according to InfoWorld. In the emerging market for low-cost mini-notebooks, many manufacturers have been scrambling to get designs to production very quickly. The Atom chip has been heavily marketed by Intel this year, and the response from customers seems to have exceeded not just its expectations, but also its production capacity.

The lack of distribution is not related to resources or the physical assembly of the chip, about 2,500 of them can be made from one 300mm silicon wafer. When the chips get to the testing phase of production they are be running into a traffic jam. Intel has been reserving those limited resources for its more profitable chips, such as Core processors.

According to InfoWorld, Intel has been doubling its shipment expectations every six weeks since January, but has still resulted in a low supply. Asustek, producer of the Eee PC, has been forced to change a few of its designs to use the Celeron M 353 chip instead. Other companies might be considering similar options if high production volume is needed.

Intel is in the process of building a new assembly and testing facility in Vietnam. Since the project began, Intel has increased the projected size from 150,000 square feet to 500,000 square feet, raising the cost to an estimated $1 billion. Production will begin next year, and will make it Intel's largest production and testing location. This will surely alleviate some of the capacity issues that are being encountered this year.