Processor war intensifies as AMD slashes prices

AMD on Monday slashed the price of some PC processors by as much as 57 percent as it fired the latest salvo in a battle with rival Intel Corp.

Advanced Micro Devices has slashed prices on some PC processors by as much as 57 per cent in a new price list, firing the latest salvo in a battle with rival, Intel.

The list is a sign the company is defending its hard-won market share against Intel. The world's largest chipmaker 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 per cent by per cent 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 space 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 $US301 from $US696 when it last published a price list in May. It also cut the price of the Athlon 64 X2 4600+ (socket AM2 and 939) by 57 per cent to $US240 from $US558.

Although the biggest AMD price reductions were in PC processors, the company also cut prices for laptop processor prices as well.

Prices of its AMD Turion 64 mobile chips fell by as much as 26 per cent, with its Model ML-44 down to $US263 from $US354 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 per cent in the second quarter compared to the same time last year, putting it well on its way to meet its goal of holding a 30 per cent 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 per cent of chips to the server market, compared to a 76.8 per cent share for Intel, according to market researcher, IDC.