Intel is reportedly planning to raise its processor prices, according to a paywalled report from DigiTimes Asia.
The theory is that Intel is trying to “push brand PC vendors into making purchases in advance” due to an oversupply problem, and this is the company’s way of reducing supply as quickly as possible.
Coverage from Tom’s Hardware has pointed out that this isn’t a new tactic for Intel.
This strategy isn’t new and has been used quite often to accelerate sales when needed. However, the side-effect of this strategy is a noticeable reduction in sales later in the year, since PC vendors will have already bought up more supply than they need. Nonetheless, this strategy should theoretically allow Intel to reduce its oversupply issues, which seems to be the top priority for Intel right now.
Industry sources with DigiTimes Asia believe that both consumer and server processors, as well as Wi-Fi chips, could see increased pricing this fall, although there’s still a possibility that Intel’s plans could change.
A separate report from Nikkei Asia claims that Intel has already “informed customers it will raise prices on a majority of its microprocessors and peripheral chip products later this year.” This is due to “surging costs for production and materials.”
The biggest U.S. chipmaker plans to raise prices this autumn on flagship products such as central processing units for servers and computers, where it dominates the market, as well as on a wide range of other items, including chips for Wi-Fi and other connectivity, according to three industry executives with direct knowledge.
Nikkei Asia’s report also pointed out that Intel executives had already hinted at price rises during its last earnings conference. CEO Pat Gelsinger said that Intel would “remix the products to higher price points,” while CFO Dave Zimmer mentioned that the company was “looking for targeted price increases in certain segments.”
Source: DigiTimes Asia (via Tom’s Hardware)
Discussion (4 replies)
Join Discussion →I'm not surprised competitive pricing is never something Intel chose to practice. So as long ss they have what they feel to be a performance crown they will charge for it.
Not to say AMD isn't the same. Just thst they want to grow market share more.
"We have too many chips in our inventory. How do we clear them out?"
"Raise prices!"
Yep, sounds like Intel.
It's a marketing tactic - if it works like they hope, it will have the same effect as a sale. People will rush out to buy the chips while they are cheap before the price goes up, and the supposed price increase later helps to reenforce the image of Intel as a premium product with the pricing to match.
If it doesn't work as the marketing people want, that "price increase" doesn't materialize, and they haven't really lost out on anything, nor have they tarnished their brand reputation as anything other than a premium product.
After the most recent addition to the cumulative performance-crippling mitigations for speculative-execution vulnerabilities ("Retbleed"), many people are finding it difficult to detect whether their Intel processors are powered on. One would expect that new CPUs are in great demand as a result, so it's a good time to raise prices.