Intel and AMD are to go head to head in a microprocessor price war after both firms announced significant price reductions for their products. The two firms hope that the price cuts will stimulate demand in a PC market currently struggling due to a slowdown in corporate and home user technology spending.
Intel announced price cuts of up to 53% last month. The price of the company’s Pentium 4 chip has been cut by 29% for quantities of 1,000. Intel’s rival, AMD, followed suit and cut the prices of its microprocessors by up to 52%. AMD is also rumoured to be planning even more aggressive price cuts for its mobile processors.
Intel claim that its price cuts are a direct result of the company’s investment in upgrading its chip production facilities. AMD had to follow Intel’s lead and cut prices in order to remain competitive. The company also had to make room for its new line of chips due to be introduced during this month.