Intel may need to adjust roadmap for PC-use Atom processors

Monica Chen, Joseph Tsai, 3 September 2012

Intel may be forced to adjust its roadmap for PC-use Atom processors as the top-2 netbook vendors – Asustek Computer and Acer – both plan to stop manufacturing related products, according to sources from notebook players.

Asustek is already set to halt its Eee PC product line and officially phase out from the IT industry after completely digesting any remaining inventory. As for Acer, so far, the company has not yet made any plans to open new netbook projects, indicating that the vendor may also plan to step out of the market.

Although Atom series processors will still be adopted by handset and embedded products, the sources believe the two product lines are unlikely to be able to fill the gap created by the absent netbook products in short term due to weak shipments.

Asustek CEO Jerry Shen recently confirmed that the company will stop production of Eee PC netbooks using Atom-based processors such as the N2600 due to impact from tablet PCs and notebooks, as well as a sharp drop in demand in emerging markets. Asustek plans to have its Transformer tablet PCs fill the 10-inch mobile device market, replacing its netbook product line.

Micro-Star International (MSI), which is selling a small volume of Atom N2800-based products, also has no plans to continue shipping related products.

Although netbook vendors were originally optimistic about demand from Southeast Asia, Latin America and Middle East regions, as tablet PCs are rising quickly and many government procurement orders have turned to tablet PC products instead, demand for 10-inch netbooks has dropped rapidly, accelerating the segment's exit from the IT market.

In addition, Windows 8's licensing fees, and upgrades in panels to higher resolutions and touchscreen functions will all add to netbook costs forcing netbook vendors to give up the product line before entering the Windows 8 generation.

Dropping netbook orders are also expected to affect shipments of netbook ODMs Pegatron Technology and Compal Electronics.