Intel: Report on price increases also for CPUs [Update]

Original article from July 15, 2022: According to a report, Intel is planning price increases for chips, among other things. Processors and I/O chips are of course particularly in focus. According to Nikkei Asia, Intel has already informed the partners. “According to three industry executives with direct knowledge” of what’s happening, this is due to rising prices linked to the entire chip production chain. From raw materials to energy costs to logistics and also inflation, which is also supported by the monetary policy of the central banks. The rate of inflation in Western countries is currently 9.1 percent in June, for example, in the USA and 7.6 percent in Germany.

As long as the price increases are not officially confirmed, one should be careful, but the announcement should not come as a surprise and it is not the only price increase recently. They are also visible to everyone in the Ark. The jump from Intel is an example Core i9-11900K on the Core i9-12900K called, which has been raised from $539 MSRP to $589 MSRP. A less dramatic example is the platform controller hubs, where the price went up from $50 to $51 if you look at the Z590 and Z690.

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According to Nikkei Asia, customers have to be prepared for at least single-digit, but also 10 to 20 percent higher prices at Intel, depending on the product. Of course, this will hit the higher priced products in particular harder, a Core i9-13900K could end up in the $650 range if it goes up 10 percent. But even in the server area, small percentage adjustments quickly become noticeable.

“On its Q1 earnings call, Intel announced that it will increase prices in certain segments of its business due to inflationary pressures,” Intel said in a statement released by Nikkei. “The company has begun communicating these changes to its customers.” However, price increases at Intel have an impact across the industry, not just for CPUs. Intel LAN and WLAN chips are ubiquitous in products, as are FPGA chips. Intel had also strengthened itself with the takeover of Altera, AMD had bought Xilinx. On July 28th there could already be new information about the prices at Intel, because that’s when the Q2 is reported.

Source: Nike Asia

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Higher prices due to oversupply?

Update from July 20, 2022: The Taiwanese industry service Digitimes is now also taking up the topic and reports that Intel has too full stock, which is why the prices are being raised. That sounds counterproductive at first, but according to Digitimes it should be strategic. Accordingly, Intel is announcing higher prices for the future in order to get OEM partners in particular to stock up on goods now. The stocks would be sold and are no longer stock items on Intel’s books.

Of course, every measure also has a counter-effect. OEM partners who are stocking up now will buy less towards the end of the year and early next year. However, this could also play into Intel’s hands with the change to the 13th core generation. Whether the strategy works remains to be seen. For hobbyists, the question of whether you can get a good price when selling Alder Lake and what Raptor Lake will cost at the start is primarily relevant. In the system market alone, demand for notebooks is expected to increase by 14.3 percent in the third quarter – driven by the market in China and the start of the school season in the USA. However, the materials for the products have already been procured and installed. Digitimes is not sure whether Intel can enforce the higher prices with the partners.

Source: Digitimes