Intel Corp. is expected to cut prices on its highest-performance Pentium 4 processors and other chips over the weekend as the world's largest chipmaker passes on cost savings from new manufacturing technologies, analysts said.
"We would expect that they're going to reduce prices," said Joe Osha, analyst at Merrill Lynch. "Intel's going to try and price things to make sure they're moving people to Northwood."
Northwood is the code name for Santa Clara, California-based Intel's newest Pentium 4 chip, in which some of the dimensions are as small as 0.13 microns. By comparison, a human hair is about 50 microns wide.
By moving to smaller line widths, Intel is able to put 55 million transistors on a single chip, and it has said it gets about twice as many chips per wafer on the 0.13 micron manufacturing process than with the 0.18 micron process.
The fastest Pentium 4 chip now runs at 2.2 billion cycles per second, or 2.2 gigahertz, costing $562 in lots of 1,000. When Intel introduced that chip on Jan. 7, it dropped the price of its 2.0 gigahertz Pentium 4 made with 0.18 micron technology to $342.
"If the 2.2 gigahertz Pentium 4 is above $500 on Monday I'll be very surprised," said Nathan Brookwood, president of market research firm Insight 64. He estimated that Intel will drop the price of that processor to the high $400 range, implying a decrease of about 15 percent.
An Intel spokesman declined to comment on the price cuts.
News source: Reuters - Intel Expected to Cut Pentium 4 Prices Over Weekend
"We would expect that they're going to reduce prices," said Joe Osha, analyst at Merrill Lynch. "Intel's going to try and price things to make sure they're moving people to Northwood."
Northwood is the code name for Santa Clara, California-based Intel's newest Pentium 4 chip, in which some of the dimensions are as small as 0.13 microns. By comparison, a human hair is about 50 microns wide.
By moving to smaller line widths, Intel is able to put 55 million transistors on a single chip, and it has said it gets about twice as many chips per wafer on the 0.13 micron manufacturing process than with the 0.18 micron process.
The fastest Pentium 4 chip now runs at 2.2 billion cycles per second, or 2.2 gigahertz, costing $562 in lots of 1,000. When Intel introduced that chip on Jan. 7, it dropped the price of its 2.0 gigahertz Pentium 4 made with 0.18 micron technology to $342.
"If the 2.2 gigahertz Pentium 4 is above $500 on Monday I'll be very surprised," said Nathan Brookwood, president of market research firm Insight 64. He estimated that Intel will drop the price of that processor to the high $400 range, implying a decrease of about 15 percent.
An Intel spokesman declined to comment on the price cuts.
News source: Reuters - Intel Expected to Cut Pentium 4 Prices Over Weekend
"This is a very normal, seasonal kind of thing," Brookwood said, adding the prices will also come down on Intel's 2A Pentium 4 processors, the 2.0 gigahertz Pentium 4, the 1.9 gigahertz Pentium 4 and the 1.8 gigahertz Pentium 4.
Those processors are now priced at $364, $342, $273 and $225, respectively, according to Intel's price list published on its Web site.
Intel typically introduces new processors at the beginning of January, then drops prices on them later in the month. Another round will come in April, when Intel introduces even faster Pentium 4 processors, Brookwood said.
"In April we'll see some new, faster Pentium 4s, and they'll show up at this $500 to $600 price range," Brookwood said. "Given the transition to 0.13 micron they now have a lower cost structure on Pentium 4 and can bring those prices down without any impact to their margins."
Last week, Intel released seven new processors for notebook computers, spanning the price and performance spectrum. For more expensive laptops, Intel announced its Pentium III-M processors running at 850 megahertz and 866 megahertz for so-called "thin and light" notebooks, which usually weigh about four pounds.
The company also unveiled a 750 megahertz ultra low voltage Pentium III-M processor, which consumes half of a watt of energy or lower, and will run what are known are mini-notebooks that weigh three pounds or less.
Intel also released new Celeron mobile processors, which are designed to go into budget laptop computers, running from 1.06 gigahertz to 1.2 gigahertz.
Commenting has either been disabled on this article or you are not logged in. Click here to login or register, its free!
Note: Anonymous commenting is disabled in order to keep the quality of responses to a high standard.