The chipmaker lopped as much as 38 percent from the price of its desktop Celeron and Pentium chips this week. It made smaller cuts, up to 24 percent, on its mobile Pentium III processor.
The cuts, scheduled in advance by Intel, are designed to help Intel keep pace with the markets served by the chips, an Intel representative said.
Intel introduces its Celeron chips, for example, at relatively low prices. Typically, a desktop Celeron chip starts around US$150 and moves down the pricing ladder quickly. The 850MHz Celeron, introduced in early April at US$138, was cut by 38 percent to US$86 in the latest price moves. The 800MHz Celeron fell 20 percent, from US$93 to US$74.
The company also dropped prices on its 667MHz, 700MHz, 733MHz and 766MHz Celeron chips by between 7 percent and 16 percent.
Analysts were not surprised by the cuts. "There are many good reasons for Celeron to be cheaper," said Dean McCarron, principal analyst with Mercury Research. "I would attribute price cuts to two things, mostly higher speed grades coming and also competition from AMD."
Intel is expected to launch new 900MHz and 950MHz Celeron chips in the second half of the year.
Intel also reduced prices for mobile Pentium IIIs, including its 900MHz and 1GHz mobile chips. The 900MHz mobile Pentium III was reduced by 17 percent from US$508 to US$423, while the 1GHz was lowered by 12 percent from US$722 to US$637.
The largest mobile price cut made by Intel was on the 700MHz "low-voltage" Pentium III. The chip was reduced by 24 percent from US$316 to US$241.
Several new mobile chips, including faster 1.06GHz and 1.13GHz mobile Pentium III processors, will be announced by Intel in July.
Intel also sliced the price of its 1GHz desktop Pentium III chip by 14 percent, from US$225 to US$193. The chipmaker recently cut prices on its Pentium 4 chip by as much as 50 percent.
Advanced Micro Devices, which cut prices earlier this month, held the line on its processor prices. The company is expected to release faster desktop chips, including a 1.4GHz Athlon, in June.