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AMD cuts prices to match Intel

Following hot on the heels of new Celerons and price cuts from Intel, Advanced Micro Devices drops prices on its K6-2 processors.

Following hot on the heels of new Celerons and price cuts from Intel, Advanced Micro Devices cut prices on its K6-2 processors in an effort to maintain its market share momentum.

With the new cuts, the volume price of AMD's K6-2 exactly match the volume price of Intel's Celeron processors at the same clock speeds, according to Scott Allen, an AMD spokesman. Allen further added that, as a result of the price cuts, the K6-2 is now more than 25 percent less than Pentium II chips running at the same clock speed.

The 400-MHz K6-2 now costs $158 in 1,000 lot quantities, the same as a 400-MHz Celeron and less than half the price of a $353 400-MHz Pentium II. The 380-MHz K6-2, meanwhile, was cut to $135 in volume and the 366-MHz was dropped to $123. Retail prices are slightly higher.

Although the prices are the same, the K6-2 offers more technology than the Celeron, added Allen. AMD's chips, for instance, come with a system bus running as fast as 100 MHz. The system bus, which serves as the main conduit between the processor and main memory, runs at 66 MHz on the Celeron and won't likely move to 100 MHz until 2000, Intel executives said today. K6-2 processors also come with 3D Now instructions, which improve performance of some graphics applications. "You are getting considerably more," Allen said.

The price war and market share battle between Intel and AMD will again be highlighted next week.

On January 12, Intel will provide the financial report for 1998, according to Intel executives. AMD will follow with its own annual financial report on January 13, said Allen.

In December, Intel told analysts that revenues would be up to 10 percent greater than the $6.7 billion in revenue reported for the third quarter, higher than earlier estimates. Various analysts have upgraded earnings estimates for both companies in recent weeks due to the strength of the computer market.

One of the chief questions in the AMD conference call will be how profitable the chip business has been for AMD. AMD made considerable market share gains at Intel's expense in 1998; however, AMD's gains mostly came in the lower ends of the consumer computing market. AMD has not had much impact as yet in the corporate computing world.

Intel is an investor in CNET: The Computer Network, publisher of News.com.