Intel has announced price cuts across its mobile and desktop chip lines, including a 40 percent drop for its quad-core chips.
The move could be a response to price pressure from AMD, which recently cut the price of its Phenom II quad-core processors. The high-end desktop PC chips now cost between $235 and $275 (£170 and (£195).
Intel's Core 2 Quad Q9650 chips, which are used in high-end gaming desktops, now cost $316, a 40 percent reduction from December. Other Core 2 Quad chip prices were cut by between 16 percent and 20 percent.
Intel's Xeon server chips and entry-level Celeron processors have also been reduced. The quad-core Xeon 3370 is now priced at $316, a 40 percent drop from December, while the Celeron 570 chip was cut by 48 percent from $134 to $70.
Intel announced last week that its fourth-quarter profit plunged 90 percent from a year earlier, as the chip maker battled a worsening economy and recorded a steep loss from investments.
The company recorded net profit of $234m for the quarter ending December 27, compared to $2.27bn in last year's fourth quarter.
The bright spot for Intel was the sales of Atom chips that go into netbooks, small laptops designed for web surfing and productivity applications. Revenue from Atom microprocessors and chipsets was up 50 percent sequentially to $300m.