Asus: Processor shortage to hit cheap laptops

Asus has predicted that a shortage of Intel's Atom processors will give its own Eee PC an advantage over other entrants to the low-cost laptop space.

Demand for Intel's Atom processors, which will power many low-cost laptops launched in the next quarter, has been strong, as a number of manufacturers hurry to launch competitors to Asus's popular Eee PC.

However, reports suggest that demand may be outstripping supply - with Intel apparently unable to fulfil more than 40 per cent of its initial orders.

"We will see a severe shortage of Atom processors that will last well into the third quarter," said Asus chief executive Jerry Shen, speaking to the Financial Times, before explaining that the Eee PC range will be less affected as it does not rely solely on the new chips.

"We will be facing strong competition starting from June which will certainly bring price pressure. But this shortage is good for us because we have two CPU platforms to respond to demand," continued Shen.

Despite these claims, Asus has struggled to meet demand for the Eee PC in the past, due to problems with battery shortages, which it recently said were nearing an end. Last month it emerged that seven out of ten orders for the Eee PC were going unfulfilled.