Intel tells customers to expect price hikes due to inflation, company confirms

Intel has been informing customers it will raise prices later this year on most microprocessors and peripheral chip products by as much as 20%, according to the company and a report out of Taipei.

The chip giant forewarned investors in its April earnings report that it would increase pricing in certain segments of its business “due to inflationary pressures” and confirmed in a statement on Friday that the company has “begun to inform customers of these changes.”

The report from Nikkei Asia on Thursday

cited unnamed sources who indicated the majority of Intel’s microprocessors and peripheral chips will see price hikes with hikes ranging from single digit percentage increases to 20% in some cases.  Those products include CPUs for servers and computers and chips for Wi-Fi and connectivity. 

Intel will hold an earnings call July 28 where analysts expect the company to report nearly $18 billion in revenue for the second quarter. At that time, more insights on product pricing could be revealed.

In April, Intel warned of weakening demand and CEO Pat Gelsinger said it planned to “remix the products to higher price points” while CFO Dave Zimmer added Intel is “looking for targeted price increases in certain segments.”

TSMC has warned of single digit percentage price increases starting in 2023.  Nikkei Asia has reported chip materials suppliers Shin-Etsu Chemical, Sumco and Showa Denko all have warned clients of 20% price increases.

Intel’s price increases could be seen in other chipmakers’ products as inflation grows in the U.S., western Europe and much of the world. The June report of U.S. consumer prices showed a 9.1% increase in a year, hitting a 40-year record.  Demand for various consumer electronics has also been down, as reported by IDC and other analysts.

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