AMD Cuts Prices, Intel Expected to Follow

Advanced Micro Devices Inc. (AMD) announced its latest round of desktop processor price cuts on Monday, and rival Intel Corp. is expected to follow the move later this month.

AMD slashed prices on its top-of-the-line desktop PC microprocessors on Monday to US$599 per pair for the 3GHz version from US$799, making it the same price as its 2.8GHz version. The move may be a sign it wants to clear out the chips ahead of the launch of its next generation chips, Barcelona. The company also reduced the price of some of its best dual-core processors, the Athlon 64 X2 6000+, which runs at 3.0GHz, fell to $178 from $241 and its AMD 64 X2 5600+, to $157 from $505, according to its latest price list.

The company has apparently stopped producing several chips, the Athlon 64 X2 3600s and 3800s.

A total of six AMD Athlon dual-core offerings for the desktop can now be bought for below $100 each. The company's single core desktop processors are all now priced below $100, with the Athlon 64 3200+, a 2GHz chip, at $48 and the Sempron 3200+, a 1.8GHz chip, at $31, the lowest price processor on the list.

AMD's laptop PC processor prices remained the same.

AMD and Intel have been in a tit-for-tat price war for well over a year now, and the results have been great for users - particularly in desktop PCs. Price reductions for microprocessors and other computer components are a natural part of the business. As products age, they lose value, so lower prices are used as a way to entice users to spend less on slightly older technology. But the market share battles between AMD and Intel in recent years have pushed both companies to boost technology and keep pricing down, to the benefit of users.

Intel is expected to follow the AMD price reductions with a round of its own price slashing on July 22, according to a report by investment banking firm Goldman Sachs Group Inc.