AMD Phenom II Processor Prices Slashed by 18%

Advanced Micro Devices is cutting the prices of its brand-new Phenom II processors for high-end PCs and gaming machines as worldwide demand for desktops and laptops slows down due to the global economy and the recession in the United States.

On Jan. 21, an AMD spokesperson confirmed that AMD has cut the price of its Phenom II X4 940 processor (3GHz) by about 18 percent from the original price of $275 to $225. In addition, the chip maker slashed the price of its Phenom II X4 920 chip (2.8GHz) 17 percent from the original price of $235 to $195.

The prices are calculated in 1,000-unit shipments.

AMD only just introduced the two new quad-core desktop processors at the International CES expo in Las Vegas early in January. The two microprocessors are part of AMD's "Dragon" platform for high-end desktops and gaming machines. The Dragon platform also includes new chip sets and ATI graphics.

The Phenom II X4 processors are considered an important part of AMD's road map, as they represent the first 45-nanometer processors that company has manufactured for PCs. In November, AMD rolled out its first 45-nm Opteron processors for server systems and workstations and the company is expected to offer 45-nm processors for consumer and commercial laptops and desktops later in 2009.

The price cuts by AMD follow Intel's reduction of the prices of several of its processors on Jan. 18. The cuts included significant reductions in the prices of Intel's Core 2 Quad processors, which are also used for gaming and high-end desktops, as well as price cuts for a number of other chips from the Pentium, Celeron and Xeon families.

Intel also introduced several new processors Jan. 18, including new Core 2 Quad chips.

In an e-mail, Phil Hughes, an AMD spokesperson, declined to say if the company was planning additional price cuts, but noted that AMD changes "prices as required by the market."

Right now, the market for hardware, especially PCs, is looking grim as consumers and business buyers cut back on their purchases of desktops and laptops. In a recent report, IDC found that PC shipments in the United States dropped 3.5 percent from the fourth quarter of 2007 to the fourth quarter of 2008, and OEMs and chip vendors have warned that the first quarter of 2009 could also see less demand for PCs and other types of hardware such as server systems.

During a discussion of Intel's fourth-quarter financial report, Intel executives did not offer any guidance for the first quarter of 2009 but warned that demand for PCs had slowed down significantly.

AMD is expected to release its fourth-quarter results Jan. 22, and the company has already warned that it plans to eliminate 1,100 jobs to help reduce costs. Wall Street analysts are calling for a loss of 54 cents a share with revenue of $1.23 billion.