Intel Atom to be a big cash cow?

Posted on Tuesday, Apr 01 2008 @ 00:20 CEST by Thomas De Maesschalck
TG Daily claims the cheap Atom processors may become a big cash cow for Intel as there will be pretty good margins on these chips:
Based on Intel's marketing pitch, the burning question we have been working on for a while, of course, just how profitable this processor will be. We have talked to several sources and received feedback with initial estimates of $2 per CPU and studied reports that the chip may cost about $4. Today, we finally ended up with a source close to the matter and one we consider to be very credible. Industry sources put Atom into the range of "$6-$8", which would be the production/packaging/shipping cost for the CPU, excluding the Poulsbo chipset. Let's just assume that Intel will be able to squeeze $40 out of system vendors for Silverthorne and Diamondville - and you have one heck of a profit margin.

Our source was "skeptical" that Silverthorne will in fact be as successful as Intel claims the CPU will be, but noted that "it will be a good cash cow". Intel is able to put 2500 Atom CPUs on one 300 mm wafer, which would put its production value at about $15,000 to $20,000. Intel should be able to easily hit a 90% yield, which would put the retail value of the CPUs on one wafer at about $100,000 or more. We're currently digging for more details on the Diamondville and Poulsbo parts, to get a better idea of final bill of materials.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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