PC Suppliers Plagued by Intel's Reduced Supply of Atom Processors

Taipei, Sept. 15, 2009 (CENS)--As Intel Corp., world's largest processor developer, has cut its supply of Atom processors, which are the major model used in netbook PCs, to raise its average selling prices and profits since the third quarter of this year. The move has left a number of Taiwanese notebook PC suppliers worried about supply deficiency, according to industry sources.

With netbook PCs surprisingly becoming popular with consumers worldwide, Intel has launched its Atom processors for the stellar product since the first half of last year. But, after one year of observation, Intel has decided to readjust its product strategy by reducing supply of the processors, mainly because popularity of the small-sized, budget-price laptops, which generate fewer margins than conventional laptops, has eroded sales of middle and high-end notebook PCs, harming its long-term profits.

At present, Taiwan's major notebook PC suppliers, including Asustek Computer Inc., Acer Inc., Quanta Computer Inc. and Micro-Star International Co., Ltd., have seen netbook PCs take up 20-30% of their shipments, insider indicated. If everything fares well, Intel's strategy is very likely prompt them to focus their shipments on middle-to-high-end notebook PCs instead of netbook PCs.

In the meantime, however, some Taiwanese IC (integrated circuit) designers, including Richtek Technology Corp., Global Mixed-mode Technology Inc., etc., may suffer declining shipments of netbook PCs due to Intel's decision, as PC makers generally adopts their analog IC chips in netbook PCs.

Insiders also pointed out that some netbook PC makers have moved to source processors functionally similar with Atom from Intel's counterpart Advanced Micro Devices (AMD) Inc., helping the second-largest processor developer to drive up its shipments of processors and chipsets in the fourth quarter of this year. Consequently, Taiwan Semiconductor Manufacturing Co., Ltd., the leading contract manufacturer of chipsets, will also benefit from an influx of AMD's contract orders.