Intel has slashed prices of some of its processors by up to 50 percent in a move it claims is for clearing out 65 nanometer (nm) processors to make way for 45nm ones. Nevertheless, the price cut might prove fatal for rival AMD (Advanced Micro Devices), whose chips have been hitherto considered low-price alternatives in the chip market.

Intel has posted a new price list on its Web site showing slashed prices of about a dozen of its processors -- most of them built using the 65nm process.

According to the new price list, two processors -- Core 2 Quad Q6700 (2.66GHz) and quad-core Xeon X3230 (2.66GHz) are seeing the maximum reduction in price -- about 50 percent -- bringing down their prices from $530 to $266. Next highest in terms of price cuts is the Core 2 Duo E6850 (3GHz), which is now priced at $183, down from $266 (almost 31 percent). Other processors seeing a price reduction are the Celeron 430 (1.8GHz), which is now priced at $34 down from $44 (23 percent) and the dual-core Celeron E1200 (1.6GHz) which is down from $53 to $43 (19 percent). Also the dual-core Xeon 3085 (3GHz) which is now priced at $188 down from $266 (29 percent).

While it may be only fair for Intel to reduce prices of some of its older chips so as to ring in newer ones, analysts are expressing surprise at the extent and scope of the price reduction. Plus the impact it is bound to have on AMD!