PC chipmakers Intel and Advanced Micro Devices this week enacted their first sweeping desktop processor price cuts of the year

Intel reduced the prices on all its desktop Pentium 4 processors by as much as 21 percent Sunday. Meanwhile, AMD cut prices on select Athlon XP desktop chips by as much as 32 percent Monday. The companies regularly cut prices on their PC processors to make way for new chips and encourage customers to buy new PCs. The companies also use price cuts as a way to stay competitive. The companies employed all three tactics in 2002, bringing down prices quickly through the middle part of last year. But it’s been several months since either company made a widespread price cut on desktop chips. Intel, which reduced notebook Pentium 4 prices in January, dropped desktop prices the last time in November. AMD hasn’t done any price-cutting since last August, when it reduced desktop prices and September, when it lowered prices on its mobile processors. But analysts say that, despite the pause, the two companies’ price cuts are arriving on schedule. Intel kicked off its latest round of cuts by nipping the price of its flagship 3.06GHz Pentium 4. It lowered the chip’s list price by 8 percent, from $637 to $589. Intel also sliced 6 percent off the list price of its 2.8GHz Pentium 4 chip—from $401 to $375. For its part, AMD’s kept prices on its new Athlon XP 3000+ and 2800+ chips the same at $588 and $375, respectively.