Intel slashes prices, intros 866MHz, 850MHz chips

A memorandum from Intel to its channel has confirmed price cuts it will make on its products as from today. (See bottom of story for links to our previous predictions about these price adjustments). At the same time, in the memo, Intel has explained the reasons for the price cuts and the introductions, which it attributes to the Chinese New Year, the recent introduction of Windows 2000, and the move from SECC2 (Slot One) to FC-PGA (flip chip) packaging. There is a shortage of motherboards to accept this flip chip packaging, the memo confirms. In a previous Intel memo we published, the company advised people, in the meantime, to use so-called Slotket technology. Sorry about all these % marks below -- this is how Intel presents its information to its customers. The memo reads: "We want to make sure that our customers have an opportunity to develop plans and take appropriate action to manage their ordering. Please note: "On February 27, Intel's price to authorized distributors for the Pentium® lll processor 550 MHz and 533 MHz will be reduced to the current price (today's disti price) of the 500 MHz Pentium III processor. Intel's price for the Pentium® lll 600 MHz processor will be reduced to the current price of the 550 MHz Pentium III processor. Intel expects market demand to quickly shift to these higher performing Pentium® lll processors. "Intel is transitioning the Pentium lll processor line from SECC2 to FC-PGA packaging. Intel expects that about 1/2 of the Pentium lll processors shipped to authorized distributors in March '00 will be in the FC-PGA package. "The transition will continue through '00. Customers should transition their Pentium lll processor-based desktop system offerings to the new FC-PGA form factor. We believe that additional coordination time is needed in order to evaluate and order Motherboards that support the FC-PGA form factor. "At the same time, Intel will make price reductions on Intel® CeleronT processors for the Value PC market segment. Intel does not expect this price move to make significant changes to the high volume runners in the Celeron processor family. "The percentage decline of Intel's published 1000-unit processor price is listed below. The new boxed processor Merchandising Incentive Payment (MIP) amounts are updated on the I.P.D. Products page. This percentage of price decline is similar to the price decline for Intel boxed processors sold to authorized distributors. Intel Product Dealers should expect to see similar percentage declines in their quoted boxed processor prices from authorized distributors. The new Intel pricing and MIP are effective as of February 27, 2000. Please contact your authorized Intel distributor after February 27 for specific pricing and availability details. "Intel appreciates your continued support as we realign our manufacturing and inventory positions to support our new products and customer demand. As well as the introduction of the 866MHz and 850MHz Coppermine Pentium IIIs, Intel notified the channel of the percentage drops as follows 800EB MHz (SECC2/FC-PGA) 24%, 800 MHz (SECC2/FC-PGA) 24%, 750 MHz (SECC2/FC-PGA) 29%, 733 MHz (SECC2/FC-PGA) 23%, 700 MHz (SECC2/FC-PGA) 26% 667 MHz (SECC2/FC-PGA) 25%, 650 MHz (SECC2/FC-PGA) 25%, 600EB MHz (SECC2/FC-PGA) 24%,600E MHz (SECC2/FC-PGA) 24%, 600B MHz (SECC2) 24%, 600 MHz (SECC2) 24%, 550E MHz (FC-PGA/FC-PGA) 20%, 550 MHz (SECC2) 20%, 533EB MHz (SECC2/FC-PGA) 10%, 533B MHz (SECC2) 10%, 500E MHz (FC-PGA) 0%, and 500 MHz (SECC2) 0%." For its Slot Two (Xeon) processors, it is also introducing a 866MHz part. The 800 MHz (SECC-Slot 2) 256K Cache drops by 29%, the 733 MHz (SECC-Slot 2) 256K Cache 22%, the 667 MHz (SECC-Slot 2) 256K Cache 15%, the 600 MHz (SECC-Slot 2) 256K Cache 0%. Here are the Celeron changes. Intel has introduced a 600 MHz (FC-PGA) and a 566MHz (FC-PGA) Celeron. The percentage drops since the last price cut on the 23rd of January are as follows. The 533A MHz (FC-PGA) 24%, the 533 MHz (PPGA) 24%, the 500A MHz (FC-PGA) 27%, the 500 MHz (PPGA) 27%, the 466 MHz (PPGA) 18%, the 433 MHz (PPGA) 0%. Prices, said Intel in the memo, are subject to change without notice and are for direct Intel customers in 1000-unit tray quantities and, "unless specified, represent the latest technology versions of the products." We will have the actual prices for you in a separate story filed tomorrow, but in the meantime it is worth referring to these links below. AMD also makes reductions on its Athlon processors tomorrow. ® Intel's Pentium III pricing to June Intel's Celeron pricing to June Intel to play speed ketchup 27 February Intel chipset roadmaps more like roadworks AMD to slaughter Intel on Athlon pricing Intel's Y2K server, desktop, mobile roadmap Intel 933MHz scheduled for May