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Intel nips Pentium M prices

The price drops, along with additional cuts expected later this month, could help offset cost increases on some components.

Intel lowered prices on its Pentium M processor over the weekend--a move that could help take some pressure off PC makers.

The Santa Clara, Calif.-based chipmaker cut prices by as much as 34 percent on its Pentium M chip for notebook PCs.

Intel usually cuts prices to make room for new processors and to encourage PC makers to move to higher clock speeds on their current processors. The company sometimes lowers prices as a competitive weapon against rival Advanced Micro Devices.

However, this time the price drop, along with additional cuts expected later this month on desktop chips, could also help offset cost increases on some components.

While the overall cost of components that go into building PCs is still moving downward, prices on Dynamic RAM (random access memory) have increased. Meanwhile, demand for notebooks, flat-panel displays and LCD (liquid-crystal display) televisions has put the squeeze on certain LCD panel sizes. Analysts at IDC, for example, reported that 15-inch LCD panels are in tight supply and commanding higher prices in some cases.

Intel cut list prices on all but one of its Pentium M chips. The 1.7GHz Pentium M, which cost $637, is now listed at $423. Meanwhile, Intel reduced the price of its 1.6GHz Pentium M by 31 percent from $423 to $294.

The company dropped the price of its 1.5GHz Pentium M by 18 percent, from $294 to $241, and cut the 1.4GHz Pentium 4 by 13 percent, from $241 to $209.

Intel also lowered the price of its Centrino bundles, which include the Pentium M processor, a group of helper chips called a chipset, and an 802.11b format wireless networking module. Prices on the Centrino bundle that includes the 1.7GHz Pentium M fell the most, dropping 30 percent from $713 to $497.

The company lowered the prices on the remainder of its Centrino bundles by between 1 percent and 26 percent.

Separately, the company on Monday announced it has launched a new 3.2GHz Xeon DP chip for lower-priced servers.

List prices reflect chips purchased in lots of 1,000. Street prices are likely to vary and may be higher.