Atom chip stymied by testing bottleneck

By Sumner Lemon

September 8, 2008 12:00 PM ET

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Computerworld - A testing bottleneck is slowing the manufacture of Intel Corp.'s Atom processor, just as computer makers are looking to plug more of the chips into small laptops called netbooks.

The chip maker's chief financial officer, Stacy Smith, first disclosed production problems in July, blaming stronger-than-expected demand for the low-end processor.

Taipei-based Asustek Computer Inc. last month blamed the production woes for its decision to use a much older Intel chip, the 900-MHz Celeron M 353, in two models of its popular Eee PC line.

An Intel spokesman late last month confirmed that the testing constraint was limiting production, but he declined to say when manufacturing will meet demand.

Dean McCarron, president of Mercury Research, noted that testing and assembling raw silicon into finished chips is a labor-intensive process, so it's difficult to increase testing capacity quickly. "[It] can only be done so fast, as one has to buy equipment, install it and set up the appropriate factory lines, etc.," McCarron said.

Also, he noted, Atom processors are cheaper than most other Intel chips, and priority in the testing process goes to more expensive models.

The bottleneck may not end until 2009, when Intel opens a $1 billion test and assembly facility in Vietnam.

Read more about hardware in Computerworld's Hardware Knowledge Center.

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