Processor war intensifies as AMD slashes prices

Some processor prices were slashed by as much as 57%

Advanced Micro Devices Inc. slashed prices on some PC processors by as much as 57% in a new listing today, firing the latest salvo in a battle with rival Intel Corp.

The new price list is a sign that the company is defending its hard-won market share against Intel. The world's largest chip maker cut its microprocessor prices last month and is widely expected to reduce them again soon. AMD has been grabbing market share from Intel for the past several months, fighting gradually increasing percentages in various product segments. But Intel has staged a comeback recently by boosting the technology in its processors and announcing several new products.

Price competition has been the latest weapon of choice for the companies, which is great for users, since the processor is the most expensive component inside a PC. It's not good for the companies, however. Both Intel and AMD missed earnings estimates when they announced second-quarter results last week, with Intel blaming lower average selling prices for part of its shortfall.

Users can look forward to bargains in the PC market in coming months as the two companies battle it out. AMD dropped the price of its dual-core Athlon 64 X2 5000+ (Socket AM2 only) to $301 from $696 when it last published a price list in May. It also cut the price of the Athlon 64 X2 4600+ (Sockets AM2 and 939) by 57% to $240 from $558.

Although the biggest AMD price reductions were in PC processors, the company also cut prices for laptop processors. Prices of its AMD Turion 64 mobile chips fell by as much as 26%, with its Model ML-44 down to $263 from $354 in May. Prices for AMD Sempron chips for desktops and laptops also fell.

There was no change in AMD's Opteron prices. The company said its sales of Opteron chips rose 141% in the second quarter compared withthe same time last year, putting it well on its way to meetting its goal of holding a 30% share of the server market by the end of this year.

As of the end of the first quarter of this year, AMD supplied 22.9% of chips to the server market, compared with a 76.8% share for Intel, according to market researcher IDC.

Copyright © 2006 IDG Communications, Inc.

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