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Intel Corp. on Sunday quietly updated its price-list with new quotes on some Intel Xeon processors for dual-chip servers and workstations. The world’s largest chipmaker slashed pricing on its Xeon offerings by up to 34%, which graded price difference between chips with different cache sizes.

The price reduction was applied to Intel Xeon processors with 2MB level-two (L2) cache based on the Irwindale core. As a result of the price decrease, the chips with 2MB cache now cost $690, $455, $316 and $256 for 3.60GHz, 3.40GHz, 3.20GHz and 3.00GHz respectively, same as models with 1MB cache at similar clock-speeds.

The reduction in processor pricing may mean that Intel is about to release higher-speed Intel Xeon processor for 2-way applications, however, that is not completely clear. Another reason for price slash may be demand to unify product line and gradually phase-out Intel Xeon chips with 1MB of cache. Given that in server environments cache size plays a crucial role, customers may switch demand to Xeon chips with 2MB cache given that the price is the same now.

In mid-August Intel already did similar trick with its desktop lineup: higher-end Intel Pentium 4 600-series processors cost less than higher-end Intel Pentium 4 500-series chips, while typical models are sold at the same price. Generally, Intel Pentium 4 sequence 600 offers better functionality compared to previous family of chips.

Intel Xeon processors with 1MB and 2MB L2 cache are produced using 90nm process technology, use 800MHz processor system bus, support EM64T, Hyper-Threading and other capabilities. The more technically advanced chips come with a bit higher thermal design power – 110W compared to 103W of predecessors.

Intel did not release any formal statements on the matter.

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