Intel cuts chip prices -- again

For the second time in a month, the chip giant takes the axe to its desktop chip prices, keeping the pressure on AMD.

Intel reduced prices for the second time in a month, cutting prices on desktop Pentium III and Celeron chips by up to 15 percent.

The chipmaker cut prices Sunday by up to 13 percent on its desktop Pentium III chips. Intel reduced the price of the 600MHz desktop Pentium III for the first time, cutting it from $669 (£415) to $615 (£381), or eight percent. It took 13 percent from the price of the 550MHz Pentium III chip, which fell from $487 to $423, said Intel spokesman Seth Walker.

Intel officials said the company's Pentium III production is strong, allowing it to reduce prices again. Intel reduced desktop chip prices on 23 August. "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 also preparing to roll out a number of new desktop Pentium III chips, starting with a new 600MHz and a 533MHz, expected to be announced 27 September. The chips, to go with Intel's new 820 desktop chip set, will support a 133MHz system bus. Walker wouldn't comment on the new chips.

Intel also cut prices on its desktop Celeron chips by up to 15 percent. The company did so with the holiday season in mind, in order to make PC prices more attractive. Intel lowered the price of the 500MHz Celeron by eight 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 chip to $64 from $73, a 12 percent cut, Walker said.

The cuts will help PC makers gear up for the holiday season. They also keep the pressure on Advanced Micro Devices. AMD has also reduced prices, cutting up to 25 percent off its K6-2 and K6-III desktop chips last week.AMD's K6-2 475MHz desktop chip received the largest cut, falling 25 percent from $152 to $114. 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.

Some AMD customers have reported seeing prices even lower than these official AMD prices for K6-2 chips. AMD, which last reduced prices in mid-May, also cut the price of its K6-III 400MHz chip by six percent, dropping it to $173.