Rumor: Intel Concerned with Atom's Growth in China

Posted 05/06/2009 at 7:00am | by Paul Lilly

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Not even Intel could have predicted how wildly popular its Atom processor would be, because if it did, it might have scaled back production from the get-go. Instead, the No. 1 chip maker is reportedly keeping its eye on the Chinese market to make sure it doesn't sell too many Atoms, going so far as to reject orders from some China-based white-box vendors, says DigiTimes.

Intel did offer up a response, calling the story unfounded and saying it doesn't comment on industry rumors, but DigiTimes' un-cited sources insist that they're being watched very closely to prevent a surge of Atom chips in China. The sources added that Taiwan-based Intel CPU distributors have had to stop accepting orders from China-based white-box makers.

It might seem strange that Intel would look to sell less product, however fierce competition in China among white-box players has started to cut into traditional notebook sales where there exists a greater profit margin. It's easy to see why, at least in this case, Intel would want to scale back Atom sales, if in fact the chip maker is doing that.

Taiwan IC distributors expect that the supply of Atom processors will fall short of demand by 500,000 units this month in China.