Microchip giant Intel has confirmed that it will raise the prices of a number of its products due to inflation.
According to information reported by Nikkei Asia, Intel has informed its customers that it will soon increase the prices of most of its processors as well as chips for Wi-Fi connectivity and others.
Although not yet determined, price increases are expected to be over 20% for some chips: Intel’s Core i processors are expected to cost over $500. Nikkei Asia specifies that this situation will affect “the majority of its microprocessors and peripheral chips”.
Falling stocks and inflationary pressure
Intel says the price increases were reported to investors during its first quarter earnings conference call on April 2, 2022. “During its April 1, 2022 earnings conference caller quarter, Intel said it would raise prices in some segments of the business due to inflationary pressures. The company has begun notifying its customers of these changes,” Intel told ZDNet in a statement.
Intel Chief Financial Officer Dave Zinsner said at the time that average processor selling prices were up more than 25% from a year earlier and that demand for high-end mobile and desktop processors was strong with both business customers and consumers.
He also noted that OEMs were reducing their inventory levels to better meet demand and that Intel was considering “targeted price increases in certain segments.” Shipments of high-end computers have remained strong in recent quarters, but shipments of cheaper computers like Chromebooks have stalled post-pandemic due to lower demand from education customers .
The suspended mega-factory project in Ohio
Gartner notes that the PC industry as a whole has raised RRPs to maintain profits as inflation increases production costs. To do this, some OEMs have reduced production of Chromebooks due to their lower selling prices and increased production of high-end products to improve their average selling prices.
Consumers are already reluctant to buy laptops due to inflation. PC shipments fell 15% annually in the second quarter of 2022, according to reports from technology analysts Canalys and IDC this week. Gartner says shipments fell 13%, the biggest drop since 2013.
The price increases come as Intel pulls out of its planned $20 billion manufacturing facility in Ohio. The company confirmed in June that it would delay the project until Congress made progress on the Chips Act for America, which would release $52 billion in funding to boost chip manufacturing in the United States.
Intel chief Pat Gelsinger told the Washington Post this week that he would delay the project if the law is not passed.
Source: ZDNet.com