Intel 2.8GHz Pentium 4 to Ship Early

In addition to raising the bar for its fastest chip from 2.53GHz to 2.8GHz, the Santa Clara, Calif., company also is considering additional price cuts this quarter in a bid to reduce its rising supply of unsold Pentium processors, sources say. Weaker than expected PC sales during the second quarter have left Intel with an oversupply of chips, a troubling situation that pushes up the chipmaker's operating costs while it struggles with a decline in overall sales. Intel first acknowledged disappointing sales last month when it surprised Wall Street analysts by issuing a lower-than-expected earnings forecast for the quarter, a move that spurred a sell-off of stock that sent the company's shares down about 20 percent. In a bid to boost the attractiveness of its leading brand, Intel moved up the launch of its 2.8GHz Pentium 4 from the fourth quarter to this summer, sources said. The chip, which will be released in the coming weeks, will initially be offered at $637, with the price of its current speed king, a 2.53GHz chip, falling from $637 to $433.