Report: Intel Slashing Chip Prices

chipset Barron's reported Friday.

Intel was said to have cut prices by 50 percent on Atom, Core i3, Core i5 and Core i7 chips and by 15 percent for other chipsets. The move was meant to fuel short-term demand, though a reduction in prices would mostly result from computer builders stocking up, according to the report.

"We maintain our rating and lower our estimates and price target following recent checks into demand and pricing. We believe Intel has dramatically lowered prices for microprocessors and chipsets in a bid to stimulate demand, offset effects of iPad, and clear inventory," analyst Bobby Burleson said in the report, according to Barron's.

The Canaccord report surfaced amid murmurings that Apple's iPad may be cutting into traditional notebook sales. This could be directly hurting Intel's business since the iPad features an ARM-based design instead of Intel's chip architecture.

While it isn't clear whether the cuts are the result of such concern, OEMs aside from Apple are cutting orders. On the other hand, Intel regularly reduces the prices of chips on slower models ahead of major releases.

An Intel spokesperson declined to comment on the report, citing Intel’s quiet period in advance of its third quarter.

“We don’t have any comment on pricing beyond our public 1KU price list posted on intc.com,” the spokesperson said in an e-mail.

Acer, Lenovo and Hewlett-Packard have all recently lowered notebook prices, and yet, Burleson says notebook manufacturers still aren't seeing a significant rise demand in both Q3 and Q4. High-end buyers are expected to hold off on Intel chips until the release of Sandy Bridge in Q1 of 2011.

Burleson predicts Q4 will see a pause in demand, as high-end notebook customers wait for volume shipments of the new Sandy Bridge processor and low-end customers digest inventory.