Chip Makers Slash Prices on Processors

Intel Corp. and Advanced Micro Devices Inc. on Monday cut the prices of some of their microprocessors by as much as 29% as the two chip firms slug it out for market share gains and seek to spur demand for personal computers in a weak economy.

The price reductions, which were widely expected, affect 10 of Intel’s more than 50 processors. Santa Clara, Calif.-based Intel, which typically reduces prices roughly every two months, now charges $401 for its fastest Pentium 4 chip, which runs at 2 gigahertz, down 29% from $562.

AMD, based in Sunnyvale, Calif., cut prices on five of its desktop processors, the company said. AMD’s Athlon XP 1800+ processor is down 12% to $223 from $252. Prices on its 1700+, 1600+ and 1500+ chips remain the same at $190, $160, and $130, respectively.

On Oct. 16, Intel reported a 77% drop in third-quarter profit before acquisition-related charges on a 25% sales decline. One day later, AMD posted its first quarterly loss in three years as sales fell 37%.