Intel Planning Earlier Price Cuts, Analyst Says

Intel Corp. will cut prices on its microprocessors by as much as 35 percent on Monday, two weeks earlier than planned, as it prepares to introduce a new chip for desktop computers, an analyst for Susquehanna Financial Group said Wednesday. Intel periodically cuts prices on its chips, usually while introducing faster versions of its processors. Price cuts on processors are closely watched as indicators of the health of chip demand and the pace of the introduction of new products. If Intel does cut prices on Monday, it would likely coincide with the release of a new line of Pentium 4 processors, code-named Prescott.

The world's largest chip maker has promoted Prescott, built using Intel's most advanced chip-making equipment, as faster and more powerful than its current line, with speedier pathways between the processor and computer memory. The analyst, Tai Nguyen, also wrote that Advanced Micro Devices Inc. (AMD.N: Quote, Profile, Research) , an Intel rival, would cut prices on its chips at the same time, but retracted that comment after a denial by an AMD representative, he said. Intel spokeswoman Laura Anderson declined to comment on the timing of price cuts. AMD spokeswoman Brenda Rarick said AMD would not cut prices next week, but declined to give further details on the timing of any cuts.

News source: Reuters

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