Intel Atom to be a big cash cow?

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.