Intel to hike CPU, chip prices due to inflationary pressure

Chipmaker Intel is planning to increase the prices of its CPUs and chips this year owing to inflationary pressures.

According to a report in Nikkei Asia, the company informed customers that it “will raise prices on most of its microprocessors and peripheral chip products later this year, citing rising costs”. 

Nikkei reported it could cover Intel’s flagship products such as central processing units for servers and computers, as well as items including chips for Wi-Fi and other connectivity. Also, the percentage increases are likely to range from a minimal single-digit increase to more than 10% and 20% in some cases.

Intel CEO Pat Gelsinger said that semiconductor shortage supply may drag on due to a lack of key manufacturing components.   

“In the supply chain, lockdowns in Shanghai and the war in Ukraine have demonstrated more than ever that the world needs more resilient and more geographically balanced semiconductor manufacturing,” he said.   

The chip shortage cost the US economy $240 billion last year. Intel’s move comes amid a supply-chain crisis triggered by the global pandemic that has deprived makers of PCs and smartphones to cars of computer chips to make their products.   

Qualcomm acknowledged chipset supply issues mid-way through 2021. During Qualcomm’s Q2 earnings call last year, CEO-elect Cristiano Amon said, “We have seen, probably a shortage across the entire industry. It’s been broad across the industry, not unique to handsets.”    

In June, memory chip firm Micron Technology also raised concern on ‘chip shortage’ and said that it would ‘reduce production’. The companies said that the shortage of processing components may continue to have knock-on effects for other markets, including automotive, cryptocurrency, and smartphones, and price increases for products across various industries.  

“We expect the industry will continue to see challenges until at least 2024 in areas like foundry capacity and tool availability,” Gelsinger noted.