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8/5/2005
03:07 PM
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AMD, Intel Slash Prices

Intel cut prices on its Centrino chips, and AMD on its whole product line. More cuts may be in the works.

Intel and Advanced Micro Devices both swung their axes last week during one of the biggest weeks in processor platform price cuts in the past two years—and more reductions are potentially in the works.

Intel, Santa Clara, Calif., clipped pricing on its highest-volume product this year, the Centrino mobile platform, by more than 30 percent in some instances. It also made less drastic cuts for chips in its low-end Celeron lineup.

For example, the price for Centrino 770, which includes 2 Mbytes of L2 cache, a 2.13GHz processor with an 915 GM chipset and an Intel Pro/Wireless card, was cut almost 31 percent to $485 from $700.

AMD, Sunnyvale, Calif., also enacted price reductions throughout its product line last week. Within its dual-core desktop line, for example, AMD cut pricing on its Athlon64 X2 dual-core chip to $902 from $1,001, a 10 percent cut.

“Our goal is not to be the low-cost provider to the market,” said Kevin Knox, AMD’s vice president of commercial business. “If that happens, so be it. But we want to be the price-performance leader.”

Steve Bohman, a product manager for Columbus Micro Systems, a Columbus, Ohio-based system builder and an Intel Premier Provider, said he has been told to expect another price reduction from Intel on Aug. 14. That move could put pricing for Intel’s Pentium 4 600 Series “performance” chip on par with the 500 Series, he said.

“That processor has a lot of compelling arguments,” Bohman said, pointing to 64-bit capability, 2 Mbytes of cache and power management technology. “To me, that [price cut] is what I’m looking for."

Intel declined to comment about the moves.

Deep price cuts have been few and far between from Intel and AMD over the past two or more years as the GHz race has slowed to a crawl. But with the advent of dual-core processing, more efficient manufacturing processes by both companies and other competitive dynamics, pricing has once again emerged as a potentially critical front in the Intel-AMD market war.

That war is also headed to the courts in the form of AMD’s antitrust lawsuit against Intel, filed earlier this summer in federal court in Delaware. The next step is expected by Sept. 6, when Intel is expected to file its formal response to AMD’s charges that it has acted unfairly in the marketplace.

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