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July 16, 1998

INTEL SAID TO BE SELLING GRAPHICS CHIPS “BELOW COST”

By CBR Staff Writer

Intel Corp is facing new allegations that it has been selling its 740 graphics chips onto the Asian market at below cost. According to the Microprocessor Report, the usual distributor price for the chips is $28 per chip, and Intel says it hasn’t sold any to its distributors at a lower price. But direct customers receive volume discounts. The allegations have it that prices have been cut to around $17 per chip, although Intel again denies that discounts have been that steep. The Report has even heard of bundling deals that reduce the price to as low as $7, when bought in conjunction with Intel CPUs and core logic. Should the Federal Trade Commission intervene? Not according to the Report, which claims that the 740 is not a strong enough product to drive out anything but the weakest of 3D chip vendors, and that those vendors under threat should be more worried about competition from S3 Inc’s Savage3D chip and others that comfortably outperform the 740.

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