Asustek turns to Celerons amid Atom shortage

Asustek Computer has turned back the clock to use Intel microprocessors first launched in 2004 in its latest Eee PC netbooks, in part due to a shortage of Intel's Atom chips.

Asustek also turned to Intel's older Celeron M 353 chip because it costs less than the Atom, and Asustek's new Eee PCs are being aimed at price-sensitive developing nations, an Asustek executive said.

"There's a serious shortage of Atom microprocessors," said the executive, who declined to be named because she is not authorized to speak with the press. "We're focusing our Atom supply on the Eee PC 901, 1000 and 1000H models."

The products she referred to are higher end netbooks, slightly more expensive than the newer 904HD and 1000HD, which use the Celeron chips.

Asustek could have turned to rival microprocessors such as Via Technologies' Nano, but it did not because Asustek traditionally uses Intel products, she said.

The decision to use Celerons shows that the shortage of Atom products is affecting product design decisions. The Celerons would also have been quite inexpensive to procure due to their age. Microprocessor prices go down over time as products with better technology take over.

An Intel representative said the company doesn't sell Celeron M processors for netbooks these days, but that the chips are available.

The world's biggest chip maker expects to have the Atom supply issue resolved by the end of the third quarter, he said.

During a conference call last month, Intel CEO Paul Otellini attributed the Atom shortage to problems in the chip supply chain as well as strong demand for the processors. Intel has increased its production plans for the chips every 40 days since last November due to strong demand, not just for netbooks, but also for embedded and consumer electronics, he said.

(Sumner Lemon in Singapore contributed to this story)