Intel's Atom Sales Exceeding All Expectations

Forget any talk of shortages or competitive pressure from VIA, Intel's Atom processors are thriving amid the recent Netbook and Mobile Internet Device (MID) movement. "Atom is off to a very, very rapid start, far exceeding our expectations when we started the year," CFO Stacy Smith said in an interview Tuesday. "It's the perfect recession product to have in the marketplace."

The success of its Atom processor has helped Intel achieve a 25 percent rise in quarterly profit despite a weak global economy, with Smith maintaining an overall revenue forecast in the third quarter between $10.0 and $10.6 billion.

Yields are good too. According to Smith, Intel gets about 2,500 Atom processors per silicon wafer, and while that's not quite as good as on a Core or Xeon chip, it's enough to ensure strong profitability on Atom CPUs. Still, Intel remains cautiously optimistic.

"We'll know kind of in six months how much of this demand (for Atom) is real and how much is customers thinking they're going to win in the market place and double-ordering," Smith said. "It seems to be growing the market rather than cannibalizing existing PC sales."

Will Intel's Atom chips continue to exceed expectations now that Centrino 2 platforms are starting to trickle out?