Chip on the Chopping Block

Intel Corp., the biggest computer-chip maker, lowered the prices of some Pentium III processors and a line of chips for cheaper personal computers by as much as 38%.

Intel dropped the cost of an 850-megahertz Celeron to $86 from $138 in volume purchases, cut a 1-gigahertz desktop Pentium III 14% to $193 and reduced a 1-GHz mobile Pentium III by 12% to $637, the company said on its Web site.

The chip maker has been trimming prices as it tries to stimulate demand and bolster the acceptance of its latest Pentium 4 processor. Rival Advanced Micro Devices Inc. has picked up sales from Intel in the desktop PC market and earlier this month introduced a new set of laptop chips that sell for less than Intel’s, even after these cuts.

The 1-GHz mobile Athlon from Advanced Micro costs $425.