A spokesman said most of the discounted processors were built on 65-nanometre technology which the company is phasing out in favour of its new 45nm chips. Some commentators see this as akin to car dealers cutting the prices on last year's models to make room for the latest ones.

The price of the Core 2 Quad Q6700 2.66GHz fell 50 percent from US$530 to $266, while the quad-core Xeon X3230 2.66GHz dropped from $530 to $266.

Celeron price cuts include the Celeron 430 1.8GHz, reduced 23 percent from
$44 to $34 and the dual-core Celeron E1200 1.6GHz, falling 19 percent from
$53 to $43.

The dual-core Xeon 3085 3GHz is down 29 percent from $266 to $188, and the Core 2 Duo E6850 3GHz, from $266 to $183, or 31 percent.

Intel also unveiled the dual-core Celeron E1400 2GHz for $53 and Celeron 570 2.66GHz for $134.

Some new Core 2 Duo chips were also introduced, including the E8300 6MB cache, 2.83GHz and the E7200 3MB cache, 2.53GHz at $163 and $133 respectively.

AMD said last week that it's on track to ship its first 45nm chips in volume in the fourth quarter ­ about one year behind Intel.