It has been known for a while that Intel is planning a Blue Light Special on Netburst and Pentium M CPUs. Last week we learned more detail about the scope of Intel’s plans, along with the fact that AMD was looking at the possibility of lowering prices on its Athlon and Sempron chips. According to Taiwanese IT site DigiTimes, AMD has decided to pull the trigger on some serious price cuts of its own.
Reports are that AMD will be dropping prices beginning later this month. The first reductions will cover the single-core Athlon 64 CPUs, which will see price cuts of up to 30 percent. The next round of cuts will begin on July 24, one day after Intel officially launches the Core 2 Duo (Conroe) CPU and slashes prices on the Netburst CPUs. At that point, AMD plans to slash prices on the dual-core Athlon 64 X2 by 25 to 50 percent and the Sempron by 10 to 15 percent.
When contacted for comment about the possibility of price cuts on AMD CPUs, a company spokesperson said that AMD’s pricing strategy "remains unchanged" and that it remains committed to pricing its prodcuts "according to the value they deliver." That’s not surprising, as nothing will kill sales quicker than saying "this product will cost half as much in a month."
Unlike Intel, AMD does not have a new architecture coming out that would make the discounted chips previous-generation technology. The company recently adjusted prices across its lineup after introducing a new lineup of energy-efficient CPUs. Those cuts were quite modest, intended primarily to better position the "old" CPUs against the lower-power CPUs.
Some of the price drops look to be quite dramatic. In particular, the Athlon 64 X2 3800+ will see a major price drop down to somewhere between US$152-161 each in quantities of 1,000. That’s quite a drop from the US$303 price for the non-energy-efficient 3800+ set last month when the less-power-hungry lineup made an appearance.
AMD may pay a heavy price by choosing to engage in a price war with Intel. The company does not have any significant new products due out until 2007, which is when the quad-core K8L will debut at 65nm. Cutting prices on current-generation technology means that AMD would take a hit on profits. Still, the short-term financial pain may be worth it if AMD is able to keep PC builders from dipping their toes in the Core 2 Duo waters. It will definitely be worth it for consumers who will benefit from lower prices across the board.