Tom's hardware just featured a piece on Intel's Atom processor. While this new low-end processor family for UMPCs and mobile Internet devices has already been well-covered by the media, the most interesting piece of the article related to the cost of the chips themselves:
Our source was "skeptical" that Silverthorne [the cheaper of the two Atom incarnations] will in fact be as successful as Intel claims the CPU will be, but noted that "it will be a good cash cow". Intel is able to put 2500 Atom CPUs on one 300 mm wafer, which would put its production value at about $15,000 to $20,000. Intel should be able to easily hit a 90% yield, which would put the retail value of the CPUs on one wafer at about $100,000 or more. We're currently digging for more details on the Diamondville and Poulsbo parts, to get a better idea of final bill of materials.
But if Silverthorne takes off in a spectacular manner and sparks a new generation of MIDs and UMPCs, the Atom lineup could end up earning more money than Core 2 does. And that really gives us some food for thought.
This sort of profit margin on Intel's side means some seriously cheap hardware in the Classmate niche for Ed Tech. I'll be very interested to see where this lands when Intel and OEMs announce Atom-based devices in the coming months. Suffice to say, this could drastically change my purchasing plans for the summer.