Intel slashed prices on some desktop PC microprocessors by more than half on Thursday, raising the stakes against rival Advanced Micro Devices (AMD), which cut prices earlier this week.

Users should see the price reductions translate into substantially lower prices for powerful desktop PCs in coming months. The microprocessor is the most expensive component inside a PC, and both Intel and AMD have cut prices on some of their most powerful chips.

Intel marked down the price of its Intel Pentium D processor, the 960 that runs at 3.6GHz, to $316, down 40 percent from $530 in early June, according to a new price list published Thursday on its Web site.

The company also chopped prices on some of its Intel Pentium 4 processors that support hyperthreading technology. It marked down the 3.6GHz version of the processor that has an 800MHz front side bus to $183, down 54 percent, the 3.2GHz model of the chip by 61 percent to $84, and the 3GHz version by 58 percent to $74.

Intel also cut prices on some laptop processors, but none by more than 1 percent. Prices of server and workstation processors remained unchanged.

On Monday, AMD pared prices on a number of its desktop chips and some laptops. It cut the price of its dual-core Athlon 64 X2 5000+ to $301 from $696 in May. It also cut the price of the Athlon 64 X2 4600+ by 57 percent to $240 from $558.

Price competition is the latest weapon the two companies have turned to in their fight for microprocessor market share. AMD has gained on Intel over the past few quarters due to the launch of some advanced processors, but Intel has come back recently with new offerings of its own.

The world's largest chip maker on Thursday unveiled what's been billed as its most significant new processor launch in over a decade, the new Core 2 Duo processor lineup. The 10 new chips Intel will offer should start showing up in systems in coming months, starting with desktops in early August.

Intel's new July 27 price list can be found at http://www.intel.com/intel/finance/pricelist/July_27_06_1ku_Price_Final_web.pdf

AMD's July 24 price list is at http://www.amd.com/us-en/Processors/ProductInformation/0,,30_118_609,00.html?redir=CPT301