Intel slashes chip prices as demand stalls

Intel is slashing prices on a number of its processors, including cuts of up to 40% on some of its higher-powered, faster quad-core chips, as the world's largest chip maker copes with weakening demand, Reuters reports.

Last week the company reported a 90% fall in profits in Q4.

The company, which called the changes part of regularly scheduled price moves, is confronting slumping demand brought on by the global economic slowdown, along with new, cheaper chips from Advanced Micro Devices Inc.

Reuters says Intel reduced the price of its Core 2 Quad Q9650 chip, which is used in PCs, to $316 from a $530 list-price in December. It lowered prices on other Core 2 Quad chips by 16 to 20%. Quad-core chips have four processors on one piece of silicon.

AMD recently launched its Phenom II quad-core chips, which have a top list price of $275.

American Technology Research analyst Doug Freedman was reported by Reuters saying that AMD has a 'much more viable product portfolio than they did last year,' but said Intel's move was also an acknowledgment of the tough economic times."

Intel also cut prices on a number of other chips used in desktops, notebooks and servers. Prices on Pentium dual-core chips used in desktops were lowered by as much as 24%, while prices on its Celeron mobile processor were cut by as much as 48%. Prices on Intel's Xeon server chips were slashed by as much as 40%, according to Reuters.

Intel also introduced three new, more energy-efficient Core 2 Quad processors for use in desktops.