Intel cutting notebook chip prices

The giant chip maker is clearing out to make room for new products.

More megahertz to the people. Intel will this week reduce prices by up to 43 percent on mobile Celeron and Pentium II processors.

The California chip maker is preparing several new mobile offerings, including a 433MHz Celeron chip and its first Mobile Pentium III chips, which will ship this fall. The price cuts, which are usually planned well in advance, are designed in part to help move OEMs and customers to those new chips. "If manufacturing is strong, in combination with new technology on the horizon, it allows us to be aggressive with prices," said Seth Walker, an Intel spokesman.

Intel reduced prices on its mobile Pentium II chips with ball grid array packaging by up to 41 percent. The 400MHz Pentium II chip was reduced from $530 (£323) to $358 or about 32 percent. The largest Pentium II price cut came on the 366MHz chip, which was lowered 41 percent from $316 to $187.

The 333MHz mobile Pentium III was reduced by 14 percent to $161. Oddly, however, the 300MHz Pentium II was not reduced. It stays $187, making it now more expensive than the 333MHz chip. The two chips had been the same price. "Occasionally this happens" due to manufacturing efficiencies, Walker said. In other words, the 333MHz chip may be more plentiful, however, Intel doesn't comment on bin splits, which are the number of chips it produces at a given clock-speed, he said.

The largest price cuts of the day came on Intel's 400MHz mobile Celeron processor. The chip was slashed from $187 to $106, a 43 percent reduction. The 366MHz mobile Celeron wasn't far behind, reduced by about 41 percent, from $144 to $85.

The price of a 333MHz mobile Celeron was slashed 30 percent to $74 and the 300MHz mobile Celeron was lowered about 13 percent to $74. The prices are based on 1,000 unit quantities.

Intel is expected to introduce new Celeron chips this month, including a 433MHz mobile chip. The company will begin shipping its mobile Pentium III processor in speeds of 400MHz, 450MHz and 500MHz in October.