Processor wars escalate

The silicon battle is far from over, but Intel and AMD have been surprisingly quiet lately. All of a sudden though, last week word got out about a flurry of new Pentium 4 price cuts, and reviews of the new Pentium III, Tualatin revision 1.2GHz chip burst onto the Internet. Earlier this month market observer The Inquirer caught wind of a new Intel pricing scheme which would reduce the price of Celeron and Pentium III processors by some margin, 14% on the high-end Celerons at 800-900MHz, and as much as 37% on the 900-1000MHz Pentium IIIs. Intel also let slip that it would reduce the Pentium 4 range to keep the pressure on AMD, creating a low price rung of $294 for the 1.6GHz chip and later introducing the 1.9 and 2.0GHz chips at $455 and $562 respectively. Meanwhile, AMD chips were also reduced, with a 1.4GHz processor going for a song and the 1.5GHz chip supposedly only a few weeks away, but the company was feeling the pain. The share price slumped after some dodgy financial results were released, highlighting the company's burden in the price war and the weak demand for flash memory, one of its other big businesses. Good news for AMD came though in the early spat of Tualatin reviews, which showed the chip's weakness in a large number of benchmarks. With Intel chips selling clock-for-clock as much as $150 more than their AMD competitors, the market wasn't going to put up with a poor performance to boot, and sales will no doubt suffer. Tualatin was always going to be a last gasp process for Intel - a way of satisfying the corporate and desktop markets who weren't so eager to overhaul for Pentium 4, so it will sell, but a question mark remains over the quantity. Analysts reckon Pentium 4 chips will come into their own with the introduction of the 2GHz chip. Those same analysts are also telling people to buy AMD while the prices are still in their favour though. Personally, I can't see a 2GHz Pentium 4 - arguably the first in the line to compete properly with the 1.4GHz Athlon - retailing for less than its main competitor. Related Feature - Pentium 4 Review