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Intel cuts processor prices up to 48%

The world's biggest maker of semiconductors is facing slumping demand and mounting competition from AMD, which has introduced lower-cost chips.

January 20, 2009|BLOOMBERG NEWS

Intel Corp., the world's biggest maker of semiconductors, cut the price of some processors by as much as 48% as it confronts slumping demand and new lower-cost chips from Advanced Micro Devices Inc.

The price of the Celeron 570 processor, designed for laptops, dropped 48% to $70, Intel said Monday. One of the company's quad-core desktop-computer models, which have four processors on one piece of silicon, dropped 40% to $316. Intel kept the price of its three most expensive desktop chips unchanged.

The shrinking economy is crimping personal-computer orders, creating a glut of processors. The Santa Clara, Calif., company, mired in its worst slowdown since 2001, also faces mounting competition from AMD, which introduced chips this month at half the price of comparable Intel products. Still, the price cuts aren't a reaction to that, Intel said.

"These changes are part of our regularly scheduled price moves," spokesman George Alfs said. "Intel has been bringing higher and higher performance to a range of price points over many years."

AMD's two new Phenom II processors, unveiled Jan. 8, are the highest-performing products ever produced by the Sunnyvale, Calif., company. Outfitted with more memory and four processors, the chips sell for $235 and $275.

Intel also announced new chips Monday for "massive-compute" jobs. Those products, which have four processing cores, are designed to enable desktop computers to handle heavy-duty data crunching.

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