Intel, AMD processor price war escalates

Intel Corp. reduced processor prices for the second time in a month, cutting the cost of desktop Pentium III and Celeron chips by up to 15 percent last week.

The Santa Clara, Calif., chip maker cut prices by up to 13 percent on its desktop Pentium IIIs. It lowered the price of the 600MHz desktop Pentium III for the first time, cutting it from $669 to $615, or 8 percent. It cut 13 percent off the price of the 550MHz desktop Pentium III, which fell from $487 to $423, said Intel spokesman Seth Walker.

Intel officials said Pentium III production is healthy, allowing the company to reduce prices again. Intel cut desktop chip prices Aug. 23. "Pentium III manufacturing continues to be strong, so we were able to give customers higher levels of performance for a lower price," Walker said.

Intel is preparing to roll out new desktop Pentium IIIs, starting with 600MHz and 533MHz models, expected to be announced Sept. 27. The chips, to go with Intel's 820 desktop chip set, will support a 133MHz system bus. Walker declined to comment on the new CPUs.

Intel also cut prices on its desktop Celerons by up to 15 percent.

Intel lowered the price of the 500MHz Celeron by 8 percent, from $167 to $153. The 466MHz Celeron was reduced by 13 percent, from $114 to $99. The 433MHz Celeron got the biggest price chop, falling 15 percent, from $93 to $79. Intel also dropped the 400MHz Celeron from $73 to $64, a 12 percent cut, Walker said. The cuts were made to help PC makers gear up for the holiday shopping season. The cuts also keep pressure on Advanced Micro Devices Inc., of Sunnyvale, Calif.

AMD has also reduced prices, cutting up to 25 percent from its K6-2 and K6-III desktop chips two weeks ago. AMD's 475MHz K6-2 desktop chip got the largest cut, falling 25 percent, from $152 to $114. The 450MHz K6-2 was reduced 17 percent, from $112 to $93. The price of the 400MHz K6-2 was cut by 11 percent, dropping the price from $82 to $73, company officials said.

Some AMD customers reported seeing prices lower than these official AMD figures for K6-2s. The company, which last reduced prices in mid-May, cut the price of its 400MHz K6-III by 6 percent, dropping it to $173.

Intel can be reached at (800) 628-8686 or www.intel.com. AMD is at (800) 538-8450 or www.amd.com.

More price cuts from Intel