According to a new report, Intel could be about to introduce a substantial price increase on most of its catalogue. Unfortunately, this also includes consumer-grade processors. The company cites an increase in production and the cost of materials as the reason it decided to increase its prices.
For customers, it all boils down to one thing: PC hardware and pre-built desktops and laptops can be much more expensive. The two key questions are: How much worse will prices get, and how will Intel’s competitors respond to this decision?
The report comes from Asian Nikkei. According to the publication, Intel has already started informing its customers of the fact that it will raise the prices of most of its products. This change will affect microprocessors and peripheral chip devices, which boils down to consumer CPUs and enterprise-grade products such as high-performance server chips. Intel also produces a wide range of other items, including various Wi-Fi chips and controllers.
It’s unclear how much higher prices will be if this change goes into effect, and there’s no catch-all to refer to: percentages will differ by product. However, Nikkei Asia says we can expect to see a fairly wide range, from single-digit gains to a 20% higher price.
Assuming that the price of some of the best Intel processors will rise, this change will echo in more than just the PC hardware market. Intel processors are also found in all kinds of PCs, including pre-built desktops and laptops. Once the manufacturers of these devices pay more to use an Intel CPU, they may have to, in turn, increase the prices of the final product. They could also turn their eyes to AMD Ryzen as a viable alternative.
Intel’s choice will likely spread throughout the market. During the pandemic, the market boomed in favor of the manufacturer, although it was plagued by chip shortages. There weren’t enough PCs and laptops to go around, but now, the situation has apparently been reversed. Nikkei Asia quotes Acer chairman Jason Chen, who told reporters that the company is no longer suffering from chip shortages, saying: “Some of the CEOs of the chip suppliers even called me recently to buy more chips from them. The situation has changed.”
With inflation on the rise, demand for electronics has been steadily falling, making Intel’s move risky, but he’s not alone in his decision. TSMC has also reportedly told customers that it will raise its prices by a single-digit percentage, beginning in 2023. Several other chipmakers and chip material suppliers are also cited as about to raise their prices.
At the other end of the spectrum, Nvidia has apparently finally opted to lower the MSRP of some of its best graphics cards, all due to excess supply. There is more than enough hardware and not enough people who want to buy it. It will certainly be interesting to see if Intel’s main rival in the best CPU field, AMD, will respond by raising its prices, or stay the same and attract customers who don’t want to pay the Intel premium.
Nikkei Asia claims that it had been informed of the upcoming changes by Intel itself, but until confirmed by Intel itself, stay away from treating this as fact. While Intel may be planning to raise the prices of some, or all, of its products, we won’t know the full extent of it until the manufacturer makes it official. The next earnings call for Intel will take place on July 28, so it won’t be long before we hear directly from the source.