Intel and Advanced Micro Devices have both cut prices on their PC chips by up to 24 per cent, as the two firms continue to slug it out for market share at the low end of the PC market.
For users the price cuts will help keep a fresh supply of low-cost PCs on tap.
Intel cut prices on its Celeron line of processors, which are targeted at what Intel calls the basic PC segment, by between 16 per cent and 24 per cent. Only one of Intel's Celeron processors -- the 400MHz version released last month -- is now priced above $US100.
The price of the 400Mhz Celeron fell 16 per cent, from $US158 to $US133; the 366MHz version dropped 24 per cent, from $US123 to $US93, while the 333 MHz Celeron fell 19 per cent, from $US90 to $US73, Intel said. All prices are for 1000-unit quantities.
AMD responded later today by cutting prices on its own K6-2 processors by between 11 per cent and 24 per cent.
"Intel accelerated its price cut and we had to follow along," AMD spokesman Scott Allen said.
AMD's 400MHz K6-2 dropped 15 per cent, from $US157 to $US134. The 366MHz dropped 24 per cent from $US122 to $US93. Among the lower speed grades, AMD's 333MHz chip is now priced at $US72, down 14 per cent from $US84, while the 300MHz K6-2 sells for $US62, down 15 per cent from $US73.
AMD in the past year has successfully dented Intel's lion's share of the PC chip market as it scored design wins with key PC manufacturers, Intel officials have acknowledged. Intel since vowed to take aggressive steps to regain its market share.
Despite the gains it has made, AMD last week warned of a possible loss this quarter, in part, it said, because the expected price cuts could bring down its average selling prices.
Shares in both Intel and AMD were up slightly at the Monday close of the US stock market, apparently because the price cuts were not as severe as some analysts had expected.
AMD's shares closed at $US17.13, up almost two per cent from $US16.81 at Friday's close. Intel's shares closed at $US132, up 3.5 per cent from $US127.57.