Intel’s CEO Paul Otellini had a bounce in his step going into his shareholder briefing on Tuesday. Intel’s continued dominance over AMD and a solid earnings report has left his investors glad they placed their money in hardware rather then software. Investors on the other hand are nothing if not fickle. The conference call quickly turned into a debate over the shortage of Atom processors and weakness in Intel’s flash memory business.Put on the defensive Paul Otellini hinted that Atom isn’t the chip maker’s primary focus. "(Atom) is less than a third the performance of our Centrino (processor). You're dealing with something that most of us wouldn't use," he said. He further goes on to clarify that Atom is aimed at the emerging Netbook audience and is a way that Intel can grow without cannibalizing its other processor offerings. He continued to reassure investors that Intel has plenty of Atom chips in stock and back end improvements to testing as well as increased production of chipsets should solve the problem. Intel has been steadily increasing its production capacity of the popular CPUs since November.

Atom is the brand name for Intel’s new low wattage x86 CPUs aimed at the Netbook and small consumer electronics market. Atom (code-named Silverthorne) is designed for a 45 nm process but will be revamped in 2009 to include a die shrink to 32 nm. Clock speeds for the CPU range from 800 MHz to 1.87 GHz and can be a single, or dual core design. Contrary to popular belief, Silverthorne was not specifically designed to compete with AMD’s Geode system on a chip used in the OLPC (One Laptop per Child). Rather, they will use the Diamondville platform running on the ultra low cost Mini-ITX motherboards to bring better performance and Hyperthreading to the game. Intel won’t be releasing a “system on a chip” design until its next generation of Atom processors code named “Lincroft” are launched sometime in 2009. Currently Intel’s main competition is with Nvidia’s Tegra processors which debuted in June 2008. Tegra sports pretty impressive performance but its use of the ARM RISC architecture puts it at a clear disadvantage against the popular x86 approach used in most home PC’s today.