Intel Corp chopped the price of some Pentium4 personal-computer processors by as much as 29 percent, as the biggest semiconductor maker tries to jump-start sales of its newest PC chips. Rival Advanced Micro Devices Inc followed suit with its own price cuts.
Intel reduced the cost of a 2GHz Pentium4 chip to US$401 from US$562, the company said on its Web site. The price of a 1.9GHz version fell 27 percent to US$273 from US$375, with the 1.8GHz chip dropping 12 percent to US$225 from US$256.
Advanced Micro and Intel have both lowered prices this year as they fought to win customers during an industrywide slump.
Intel already had slashed the price of the Pentium4 by as much as 84 percent since its November introduction. Analysts including Salomon Smith Barney's Jonathan Joseph and Lehman Brothers Inc's Dan Niles predicted this round of reductions in July and August.
Santa Clara, California-based Intel said earlier this month that sales this quarter will be US$6.2 billion to US$6.8 billion.
Company officials since January had been calling for a recovery later this year, and now say a recovery is unlikely by year's end after the Sept. 11 terrorist attacks.
Even before the attacks, analysts were predicting the worst decline in the chip industry's history.
Intel lowered other prices as well. The cost of a 2 GHz Xeon chip for workstations used in engineering jobs dropped 26 percent to US$455, with Pentium IIIs for servers down as much as 11 percent. Intel also trimmed the prices of some Pentium III desktop-computer chips.
Advanced Micro, Intel's biggest competitor in the market for PC processors, lowered the cost of its Athlon XP 1800+ by 12 percent to US$223 from US$252, spokeswoman Cathy Abbinanti said.
The older 1.4GHz Athlon dropped to US$125 from US$130.
A 1.1GHz Duron for cheaper PCs fell to US$89 from US$103, with a 1GHz model down to US$74 from US$89, and a 950MHz version at US$69 from US$75.
The Sunnyvale, California-based company expects an operating loss this quarter, with sales little changed to posting percentage growth in the high single digits.
Worldwide PC sales dropped 12 percent to 30.6 million units in the third quarter from 34.6 million a year earlier, Gartner Inc's Dataquest unit said this month. PC sales are forecast to decline this year for the first time in more than 15 years.
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