WITH SUPPLIES OF some Pentium 4 processors running low due to higher-than-expected demand caused by a steep drop in prices, Intel plans to announce in January further price cuts of up to 20 percent for the chips.

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A recent Intel roadmap, a copy of which was seen by IDG News Service, outlined the company's plans to further cut Pentium 4 prices on Jan. 27. If Intel sticks to these plans, the 2GHz Pentium 4 will see its price cut by 15 percent, from US$401 to around $340, in quantities of 1,000. Other versions of the Pentium 4 will also see price cuts of between 12 percent and 20 percent. The 1.6GHz Pentium 4, for example, will fall in price from $163 to around $130 while the 1.9GHz version of the chip drops from $273 to around $240, according to the Intel roadmap.

Intel will also announce a cut in the price of the 2.2GHz Pentium 4, which is scheduled to be released in January. Expected to be priced at $615 when it is first introduced, the price of the chip is then slated for a drop to around $560 on Jan. 27.

Demand for Pentium 4 processors has exceeded expectations in recent weeks, with 478-pin versions of the 2GHz Pentium 4 in particularly short supply. The 478-pin Pentium 4 is one of two versions available. The other version, which uses a 423-pin package, is being phased out in favor of the 478-pin package, which was designed to handle the electrical requirements of Pentium 4 chips running at speeds faster than 2GHz.

Intel last cut prices for the Pentium 4 on Oct. 28, slashing the price of a 2GHz Pentium 4 by 29 percent from $562 to $401. Those cuts have helped reduce the cost of PCs in the run-up to the year-end selling season and, as a result, have contributed to the current shortage of Pentium 4 chips.

While the price cuts slated for January are not as aggressive in terms of percentage as those announced on Oct. 28, they cover a broader range of processors. In October, Intel cut prices on just three versions of the Pentium 4: the 1.8GHz, 1.9GHz and 2GHz chips. The January cuts will likely cover as many as six variants of the processor: the 1.6GHz, 1.7GHz, 1.8GHz, 1.9GHz, 2GHz and 2.2GHz versions.

Whether the price cuts scheduled for January will prolong the present uptick in PC demand remains to be seen, however. "The worldwide market at the moment is actually quite soft still," said Kitty Fok, research director at International Data Corp. (IDC) Asia-Pacific. "It will help a little bit but (the strength of PC demand) really depends on how the economy will pick up."