AMD cuts chip prices

Company uses strategic markdowns to pressure Intel.

AMD, keeping the heat on Intel, has reduced prices on certain clock speeds of its desktop K6-2 and K6-III processors by up to 25 percent.

AMD's K6-2 475MHz desktop chip received the largest cut, falling 25 percent from $152 (£93) to $114 (£69). The K6-2 450MHz was reduced 17 percent from $112 to $93. The price of AMD's K6-2 400MHz chip was also cut by 11 percent, moving it from $82 to $73, company officials said on Friday.

AMD, which has not reduced prices since mid-May, also reduced the price of its K6-III 400MHz chip by six percent, dropping it to $173.

Pricing for the K6-2 500MHz, introduced in late August, holds steady at $167. By way of comparison, AMD arch rival Intel sells its 500MHz desktop Celeron chip for $167. Intel's 500MHz desktop Pentium III chip is priced at $251.

Despite the movement on its K6 line of chips, AMD has also held steady the prices on its high-performance Athlon chips. Athlon chips range from $815 for the 650MHz version of the chip to $249 for the 500MHz Athlon chip.

AMD officials would not comment on sales data, but they say Athlon is meeting projections for revenue production so far, a month after the chip's 9 August launch.

Pricing on AMD's mobile offerings also held steady. A mobile K6-III P 380MHz chip costs $349. AMD's fastest mobile K6-2 mobile chip, the K6-2-P 400MHz, costs $187.

By way of comparison, Intel, which reduced prices on its mobile chips this week, lowered its 400MHz Pentium II to $358. It had been $530. The rest of Intel's mobile Pentium II lineup, including the 366MHz mobile Pentium II, falls in at $187 or below. Mobile Celeron chips were also reduced in price this week. They start at $106, for a 400MHz version of the chip.

All prices given are for 1000-unit quantities.