World's Largest Chipmaker Slashed Xeon MP Pricing

@ 2004/04/06
Intel Corporation today reduced the pricing of its Xeon MP processor at 2.0GHz clock-speed to less than $1000. The move comes earlier than expected originally and may indicate the company’s intention to address the market of relatively inexpensive multi-processor servers as soon as possible.

From now on, Intel Xeon MP 2.0GHz with 1MB L3 cache chip for multi-processor systems costs $856 in business quantities, a 27% decrease from the previous price of $1177 and the lowest price for MP chips from Intel ever.

According to initial plans of the Santa Clara, California-based chipmaker, the price reduction of the Xeon MP 2.0GHz chip was scheduled for the 18th of April, not the 5th of April. The reason for acceleration of the plans is not clear.

While dual-processor servers offer pretty high performance nowadays, there is certainly a market for affordable multiprocessor servers that are capable of delivering more speed in complex applications that require a number of threads to be executed simultaneously.

Previously Intel has never moved pricing of its MP processors to below $1000 level, but today there are Opteron 800-series microprocessors some of which are priced at $698 and $873 in quantities from 1000 units. Sometime in the second quarter of the year, about 12 months after the AMD Opteron introduction, it is possible to expect chips from Sunnyvale, California-based company to gain momentum in the multiprocessor server space. Since Intel certainly does not want to lose a single Xeon MP design to AMD, the firm may try to increase competitiveness of its products by relatively low price.

Officials from Intel did not comment on the story.

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