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Accused of bundling Atom processor and chipset, Intel denies

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Digitimes started the “drame du jour” by basically accusing Intel of forcing PC makers to use its 945G-series chipsets* with its Atom processor. This comes in a context where chipset rival NVIDIA has announced a single-chip solution, called ION (read our take), that is smaller, has more graphics performance, but roughly the same power consumption and thermal envelope than Intel’s offering.

According to Digitimes: “in an internal statement distributed to hardware makers recently, Intel reiterated that Atom CPUs for netbooks and nettops are only available bundled with its 945GSE and 945GC chipsets”. Intel has flatly denied the report by confirming that “There is nothing preventing vendors from using the Ion platform. We sell Atom as a stand-alone processor, or as package with chipset”, said Bill Calder (Intel) said to internetNews.com.

Business can get rough, but it would be surprising (although possible) that Intel’s management sends such a memo because it is guaranteed to leak. The easy way for Intel to push its chipsets would be using discounts or raise the price of the Atom processor when it’s not sold in a bundle. I’m not sure how much money Intel makes on the 945G chipset, but I would think that the gross margin for Atom is around %50-%60, which is awesome for such a “low-cost” product. Also, I don’t imagine that NVIDIA would build a product if they knew that Intel could get in the way so easily.

In the end, I can only hope that PC makers and customers will effectively have the choice because NVIDIA’s ION will enable a new class of Atom-powered devices that might, or might not, compete with existing netbooks (depending on pricing). The folks at NVIDIA told me themselves that Atom is an “awesome processor” and frankly, I think that ION will help sell a lot more Atom CPUs in the end.

Update 12/25, 11:30PT: Intel has confirmed to us that PC makers can select whichever chipset they like. The company will not comment on rumors.

*A chipset is the electronic chip that controls motherboard-related functions including integrated graphics, USB and more.

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