Advanced Micro Devices (AMD) announced aggressive price cuts on its chips Tuesday, including a whopping 29 percent chop on its 800MHz Athlon -- a processor that's been on the market less than two months.
Other Athlon chips received price cuts of up to 29 percent, and the company also lowered prices as much as 40 percent on the K6-2, which is targeted at low-end PCs.
Although price cuts are common in the chip business, Tuesday's move by AMD appears to speed up the price slashing as its competition with Intel heats up yet again. The competition is forcing fast and furious processor introductions that result in quicker price drops. Intel reduced its chip prices Monday.
Consumers should expect PC makers, over the next quarter, to pass on the savings resulting from chip price cuts.
AMD's largest price cut was for its 800MHz Athlon processor. The chip's price was reduced 29 percent, from $849 (£518) to $599, making its per-1,000 cost $47 lower than competitor Intel's 800MHz Pentium III.
AMD officials said the price cuts were planned as part of the Athlon lifecycle and coincide with new product introductions, such as the 850MHz Athlon, introduced earlier this month.
AMD also cut prices on its 750MHz Athlon by 29 percent. It is now priced at $489. Remaining Athlons were reduced 21 percent to 25 percent. The Athlon 700MHz, for example, fell 25 percent, from $519 to $389.
AMD is no longer selling its 550MHz Athlon chip, company officials said. Filling in the space for the 550MHz Athlon is a 550MHz K6-2 chip, also introduced earlier this month.
With the new chip in the channel, AMD also cut desktop K6-2 prices. Athlon is aimed at high-performance desktop PCs and the K6-2 at lower-priced, or value, PCs. The largest cut came on the 500MHz K6-2, reduced 40 percent, from $153 to $93.
AMD is expected to announce its 900MHz Athlon chip "soon", according to company President and CEO Jerry Sanders. The chip should appear in March. A 1GHz chip is anticipated in the second quarter, as is a 1GHz processor from Intel.
AMD last cut prices in January and before that in October.
Pricing mentioned here reflects chips bought in 1,000-unit quantities. Prices on individual chips may vary.
Intel may be in trouble, rival AMD is frontrunner with its 850 MHz Athlon. There's more, too. Go with Jesse Berst to AnchorDesk to read comment about what's next in desktop chips -- and what it means to you.