Reports from China are indicating that Intel will raise prices on Core processors by the end of this year. Both the company’s PC and server processors are set to receive a price hike in the coming months.
Intel to raise processor prices by as much as 20%
Three industry executives said Intel plans to raise prices on its flagship products, such as server and PC processors. Other products are also set to receive price hikes, such as chips for WiFi and other types of connectivity.
Intel has already spoken to its customers to warn them about the price increase that its processors are going to have in the coming months. The company argues that this price increase is necessary to cover the higher production costs that now have their products.
The price increase of Intel Core processors would be between 10 and 20%. The reasons would be the increase in the costs of manufacturing materials, transportation, and labor.
In response, Intel said today in a statement to the press: “During our first-quarter earnings call, we indicated that we would increase prices in certain businesses due to inflationary pressures. Today we have begun informing our customers of these changes.”
This price increase comes as inflation is rising in every economy around the world, including the United States, which hit inflation of more than 9% in June, the highest in 40 years.
The price increase is sure to further impact PC hardware sales this 2022, which were already coming off a first-half decline year-over-year.
In April of this year, Intel also warned in its first-quarter earnings call that demand was weakening, and reiterated the gloomy macroeconomic outlook at the event afterward. Intel executives were hinting at a price hike as early as that.
TSMC, the world’s largest semiconductor maker, has informed customers that it will raise prices by single digits starting in 2023. SMIC has also informed investors that it will reflect the rising cost of raw materials through price hikes. In addition, material suppliers such as Shin-Etsu Chemical, Sumco, and Showa Denko have informed their customers that they will raise prices by at least 20%.
It’s quite possible that Intel is not the only one to raise the prices of their processors, we have to expect the same from AMD. We will keep you posted.