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He sees cuts of 15%-40$ on quad-core processors, 13% on dual-core chips and 15%-40% on Xeon quad-core server processors. He contends the timing of the cuts is unique, with scheduled price cuts typically occurring in April and October.

McConnell says the price cuts in part likely reflect excess inventory. He sees Intel’s inventory up 13% to $3.85 billion in Q4. Another factor, he says, is that the company may be losing share at Hewlett-Packard to Advanced Micro Devices. He writes that checks find that recent 20% price cuts by AMD on quad-core 45 nm Shanghai server processors could boost the company’s unit share at HP in Q1 to the detriment of Intel, forcing them to respond with price cuts of their own.