SANTA CLARA, Calif. -- Intel Corp. has cut the prices of 21 microprocessor products by a range of 9-to-53% as the company's massive investments in 300-mm wafer fabs and 0.13-micron processes helped to drive down production costs, according to a spokesman here today.
Intel has set its capital spending plans for 2002 at $5.5 billion following a record $7.3 billion in 2001 (see Jan. 15 story). Much of Intel's spending has been earmarked for 300-mm wafer frontend lines and its migration to 0.13-micron (130-nm) processes.
"These reductions are part of a routine process of lowering prices that's part of our normal business plan. Typically, you don't see price cuts of 50% or greater, but it has happened in the past," said the Intel spokesman. He attributed the new round of price cuts to Intel's aggressive spending on 300-mm fabs and the ramp of its 0.13-micron process.
"The investments have resulted in robust production yields that have opened up the opportunity to reduce prices on a range of processors," he told SBN.
Intel cut the price of its second-fastest Pentium 4 processor (2.4 GHz) by 29% to $400 each in quantities of 1,000 compared to $562 before Sunday. Intel left the price of its 2.53-GHz Pentium 4 processor unchanged at $637. The company also did not cut the price or its most powerful 800-MHz Itanium processor, which remains at $4,227, and its 1.6-GHz Xeon MP processor for server and workstations, which is at $3,692.
Intel's biggest cut was on the 1.7-GHz Pentium 4-M mobile processor, which was reduced 53% to $241 vs. $508 in 1,000-piece quantities. The 1.8-GHz Pentium 4-M mobile processor was reduced 45% to $348 compared to $637.
The 2.2-GHz Xeon processor was cut 45% to $262 in quantities of 1,000 compared to $465 prior to this weekend's price reduction.