Intel Pentium 4 prices slashed by 35%

SAN FRANCISCO: Intel Corp. has cut prices on its computer chips by as much as 35 percent, though analysts on Monday said the cuts were probably unrelated to swelling inventories of the world's largest chip maker.

Intel, which sells more than 80 percent of the world's personal computer microprocessors, cut the price of its most expensive desktop computer processor, the Pentium 4 560, to $417 from $637 on Sunday, according to the company's Website.

Prices of other desktop Pentium 4 chips were cut by 18 percent to 33 percent. Intel's Itanium 2 processor, bought by businesses for use in computer servers, was cut between 12 percent and 32 percent, depending on speed.

The Santa Clara, California-based chip maker cuts prices regularly as it introduces new, faster products, although it did not announce plans to introduce a higher-end chip along with the latest cuts.

David Wong, an analyst with A.G. Edwards, said strengthening demand for computers makes it unlikely that the latest cuts were directly related to Intel's surplus of unsold or unfinished products, which is at an all-time high.

"I think we have fairly substantial evidence that the PC market is reasonably robust," Wong said, pointing to earnings reports from Dell Inc. and Hewlett-Packard Co.

Intel shares close up 27 cents, or 1.3 percent, to $21.89 on Nasdaq.