Intel plans chip price hikes due to 'inflationary pressures'
Customers to start paying more for CPUs, chipsets and other products from October
It was almost inevitable, and now we know it's coming. Intel plans to raise the prices of various products this fall due to our common foe: inflation.
Intel confirmed the news to The Register after Nikkei reported Thursday that the chipmaker has begun telling customers that it plans to increase prices for a "majority of its microprocessors and peripheral chip products."
This includes CPUs for servers and PCs as well as Wi-Fi chips and connectivity silicon. The semiconductor giant did not specify to us which products would be impacted.
"On its [first-quarter] earnings call, Intel indicated that it would increase pricing in certain segments of the business due to inflationary pressures. The company has begun to inform customers of these changes," an Intel spokesperson said in a statement.
The Register heard about the coming price hikes from its own industry sources, who said the changes will take effect in October — when the fourth calendar quarter begins — and will also impact other kinds of products, such as chipsets, FPGAs, and Intel's NUC mini PCs.
The price increases could reportedly range from single-digit percentages to, in some cases, more than 10-20 percent. However, plans have not been finalized, we were told.
The move shouldn't come as a surprise as the semiconductor industry, much like rest of the world, has been subject to rising materials and production costs this year. Last week, we wrote about how one key chip supplier, Japanese chemicals company Showa Denko, has warned that it expects to raise prices, joining other suppliers who plan to do so.
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Intel's planned price increases are coming after analysts warned that the semiconductor industry is starting to slow down following a boom period due to inflation and other global economic effects.
At the same time, the weakening economy has caused some chips, such as GPUs, to become readily available after two years of shortages. Inflation is also behind this, as tightening budgets have lowered consumer demand. The cryptocurrency crash is a factor too, for GPUs in particular. This has prompted some vendors to lower prices in hopes of inspiring a new wave of purchases.
While GPU prices are lower than they have been for the past 24 months, price increases for chips could extend beyond Intel in the near future. That's because TSMC and Samsung, the world's largest contract chip manufacturers, reportedly plan to increase wafer prices for their chip design customers, with TSMC eyeing a single-digit increase in 2023 and Samsung making a 15-20 percent hike this year.
This raises the question of whether the price hikes will further blunt demand in a weakening global economy that some worry is close to entering a recession. Anyhow, fun thoughts for a Thursday. ®
We'd like to thank our industry source for sharing the extra information on Intel's planned price hikes. If you have information on product plans by Intel or other chip companies, you can always email us in confidence.