Intel's $6 Cash Cow

By Koushik Saha on 30.3.08

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Chip manufacturer Intel will soon introduce one of its most important products on the processor market since the first release of its Pentium series. Its ultra-efficient Atom chip will power a new and increasingly growing sector of the IT industry, targeted at the emerging markets.According to market analysts, the chip manufacturer could easily ship hundreds of millions of units in a two-year time-frame.

The new processor could shovel fortunes into the company's accounts, and Intel is reportedly gearing up to cut on manufacturing costs as much as possible. The ex-Silverthorne chip has the price advantage over all its existing and upcoming competitors. According to the company officials, the manufacturing costs per chip could be compared to those of a 286 processor.

The low manufacturing costs would allow the manufacturer sell the Atom processors cheaper and create a sub-$200 market for the upcoming Mobile Internet Devices (MIDs) and Internet-centric NetTop computers.At the moment, there is no estimative price for Intel's Atom CPU, and the chip manufacturer won't disclose any details regarding this aspect until the chip is officially introduced. However, the latest estimations claim that it will hit the market at prices ranging between $29 and $49, depending on the chip's SKU.

Sources quoted by tech website TGDaily claim that Intel will spend between $2 and $6 for manufacturing a single Atom chip. According to the same sources, the total manufacturing costs for the CPU and the Poulsbo chipset will be situated at between $6 and $8, packaging and shipping included. If the allegations are true, then Intel will get some $40 in revenue per sold chip. Multiply the number by "hundreds of millions" of shipped units and you'll get the picture.

More than that, if the Atom processor becomes the next industry standard for the upcoming Mobile Internet Devices and the NetTops, the chip could bring more money than even the best-seller mainstream Core 2 Duo processors.

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