It was a brawl in the computer chip business Monday. In a two-fisted assault on the chip market, Intel Corp. slashed prices of its Pentium microprocessors and bought chipmaker Chips & Technologies Inc. in a $420-million deal, its biggest acquisition ever. AMD quickly responded with its own price reductions, saying it would continue its strategy of selling its comparable processors for at least 25 percent less than Intel products. Further heightening the competition, National Semiconductor Corp. announced it would buy Cyrix Corp. for $550-million in a deal that would give Cyrix added muscle to sell its computer chips against Intel's. Intel, in its purchase, plans to use Chips & Technologies chips to improve the way video and three-dimensional graphics look on portable computers. Intel's actions demonstrate its resolve to sustain its dominance in its mainstream Pentium microprocessors, which are the brains in 85 percent of the world's personal computers. The Intel price cuts, ranging from 5 percent to 57 percent, are deepest in Pentium chips for PCs and laptop computers. These are areas where Intel faces rivalry for the first time in years, with challenges from such companies as Advanced Micro Devices Inc. and Cyrix. Intel reduced prices for its Pentium 200 megahertz MMX chip by 49 percent to $252. Both AMD and Cyrix have come out with rival MMX technology, which improves the ability of computers to run graphics, sound and other media applications. But Intel also slashed prices for its 150-megahertz chip for laptops by 46 percent to $125, typifying Intel's effort to kick-start slumping demand for older microprocessors as consumers rapidly switch to the newer MMX chips. That slowdown in purchases of old chips has hurt Intel in the second quarter, weakening profit and revenue. There was one notable exception in the price cuts. Intel left alone prices of most Pentium Pro microprocessors, and reduced the 200-megahertz version only 5 percent to $487, a move that could disappoint some buyers seeking bargains in midrange business computers known as servers, which run networks of computers. The prices Intel announces are for individual chips in orders of 1,000. Intel has said that its improved manufacturing of MMX chips has allowed it to cut prices more quickly than expected. Analysts said increased rivalry from AMD and Cyrix is a factor. "They just want to blow out the seeming price advantage Cyrix and AMD have had," said Richard Doherty, an industry consultant who heads the Envisioneering Group. In Intel's acquisition, it said it will offer $17.50 a share for Chips & Technologies' 22-million outstanding shares. Any remaining Chips & Technologies shares will be converted into the right to receive $17.50 a share, Intel said. Intel said Jim Stafford, Chips & Technologies' president and chief executive, will become vice president of its desktop products group. Chips & Technologies of San Jose, Calif., is known for its chips to enhance the graphics capabilities of notebook computers. Analysts said Intel's acquisition could boost demand for laptop computers using Intel chips as users such as graphic artists turn to portable machines with superior graphics capability. Intel stock closed down 62{ cents at $88.56\ on the Nasdaq Stock Market. In Cyrix, National is gaining a microprocessor compatible with Intel's Pentium chips, a key product in National's strategy of offering more complex chips with higher profit margins. The companies said they would combine technologies to produce chips for personal computers priced under $500. Aside from a contract with Compaq, Cyrix has had trouble winning sales among major PC manufacturers, many of whom speak privately about being reluctant to antagonize Intel. Cyrix lacks its own manufacturing; the chips are made by IBM. National has ample manufacturing capacity but needs higher-value chips to achieve its goal of being a top-tier semiconductor company. _ The New York Times contributed to this report.