Even though Intel Atom processors are small and inexpensive to manufacture, quick ramp of the chips using 45nm process technology is a hard task for Intel Corp. since there are orders Intel did not expect to arrive this early. As a result, according to a large maker of notebooks and components, short supply of Intel Atom will last into Q3 2008.

“We are working closely with our customers to meet their needs. We’re just seeing better-than-anticipated demand,” said Bill Calder, a spokesman for Intel Corp., in an interview with Bloomberg news agency.

Intel Atom processors – which are designed for designed mobile, small form-factor devices, affordable and embedded applications – are based on Intel Core 2 micro-architecture, but are tailored for mobile operation and manufacturing cost-efficiency, e.g., they do not feature large caches and do not sport certain peculiarities. Initially there will be five Intel Atom processors available.

Initial breed of devices powered by Intel Atom central processing units (CPUs) will be based on Centrino Atom platform for ultra mobile systems, which features Intel Atom chip as well as Intel system controller hub (SCH) that has integrated graphics core, supports peripheral buses as well as input-output capabilities. The first-generation Intel SCH called Intel US15 has built-in graphics engine that supports 3D as well as hardware accelerated 720p and 1080i high-definition video decode capabilities. In addition, the chip supports PCI Express, USB and Secure Digital I/O bus.

Intel Atom processors, just like the latest Intel Core 2 and Intel Xeon chips, are produced using 45nm process technology. At present Intel has two 300mm fabs that produce chips using 45nm process technology – D1D in Hillsboro, Oregon, and Fab 32 in Chandler, Arizona. Given that Intel has a plan to aggressively ramp up production of new desktop processors using new process technology, a slight mistake in demand prediction automatically means shortages of Intel Atom chips, which hardly received the first priority from Intel. Two additional 45nm, 300mm manufacturing factories are scheduled to open this year in Kiryat Gat, Israel (Fab 28) and Rio Rancho, New Mexico (Fab 11x), which will let Intel to manufacture sufficient amount of Atom, Core 2 and Xeon processors.

Asustek Computer, which plans to release its Intel Atom-based Eee PC sometime in June, said that thanks to strategy to use Intel Celeron M and Intel Atom processors in mid-year the company would not suffer of Atom shortages that is projected to last for months.

“We will see a severe shortage in Atom processors that will last well into the third quarter. […] But this shortage is good for us because we have two CPU platforms to respond to demand,” said Jerry Shen, chief executive officer at Asustek Computer, Financial Times reports.

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