Intel takes the axe to PC chip prices

Intel Corp. has slashed prices on its desktop Pentium III and Celeron processors by as much as one third, as the giant chip maker prepares to launch its new, high-end Pentium 4 processor in the coming weeks.

Effective Sunday, Intel’s 1GHz Pentium III processor is priced at US$465, a drop of 31 per cent. The price of the 933MHz Pentium III fell 32 per cent to $348, while the 866MHz version now sells for $241, a discount of 33 per cent, according to information posted on Intel’s Web site. All prices in this report are for chips bought directly from Intel in 1,000-unit quantities.

The chip price cuts could be good news for PC buyers, as these cuts often lead to lower-priced systems from vendors who use Intel processors.

An Intel spokesman said the price moves are part of Intel’s regular price adjustments, although the company often cuts the price of its microprocessors to make way for the introduction of new, faster processors. Intel plans to launch its Pentium 4 processor in about a month’s time, running at clock speeds of 1.4 GHz and 1.5 GHz, Craig Barrett, Intel’s president and CEO, said Friday in Taipei.

Cost-conscious buyers also got a break when Intel also took the axe to prices of its Celeron processors, which are used in budget PCs. The price of the fastest Celeron chip, which runs at 700MHz, fell by 36 per cent to $88, while the price of a 667MHz Celeron was cut by 26 per cent, to $83.

Intel also reduced the price of some of its Pentium III Xeon processors, which are used in workstations and servers. The 1GHz Pentium III Xeon with 256K bytes of Level 2 cache fell 28 per cent in price to $515, while a 933MHz version of the same chip fell 24 per cent in price, to $425, Intel said on its Web site.

Other Pentium IIIs and Celeron processors running at slower clock speeds were also cut in price, some by as little as five per cent. Intel also cut prices on its mobile Celeron processors by between seven per cent and 28 per cent. Pricing for mobile Pentium III processors remained unchanged.

Intel, in Santa Clara, Calif., can be reached at