Intel may increase CPU prices later this year

Intel is preparing to increase the prices of its CPUs and chips. Nikkei reports that the chipmaker will increase prices on its flagship CPUs and a wide range of other chips later in 2022, including Wi-Fi and other connectivity chips. Intel has already informed its customers about the price increases, and it is likely to lead to more price increases for PCs and laptops during the holiday period. Nikkei reports that the price has not been finalized, but some chips could go up 20 percent.

Earlier this year, Intel warned that it was seeking price increases for certain chips, due to ongoing inflation and rising material, shipping and labour costs. "On its Q1 earnings call, Intel indicated it would increase pricing in certain segments of its business due to inflationary pressures," shared an Intel spokesperson with Nikkei. "The company has begun to inform customers of these changes." The price increases will come just as PC shipments have seen a big decline, and inflation is already taking a toll on average PC sales prices. Gartner disclosed this week that worldwide PC shipments fell almost 13 percent this quarter. "This is the sharpest decline in nine years for the global PC market, brought on by geopolitical, economic and supply chain challenges impacting all regional markets," says Gartner in a press release.

While component shortages are starting to ease, Gartner blames inflationary pressure and a "sharp drop in demand for Chromebooks" for the PC decline. The PC market saw phenomenal growth during the first two years of the pandemic, but the combination of rising energy, fuel, and food prices, and people spending less time at home have caused the PC market to PC back to reality.

According to Gartner, the PC market in Europe, the Middle East and Africa saw an even bigger drop of 18 percent. "This is a major setback in total volume after two years of very strong growth stimulated by COVID-19 and refreshed interest in PCs among consumers and the education segment," says Mikako Kitagawa, research director at Gartner. "Abandonment or complete relinquishment of operations in Russia due to the war in Ukraine had an even bigger impact on the PC market, as Russian PC shipments for leading PC vendors used to contribute between 5-10 percent of the total EMEA PC volume."

While the PC market is faltering and Intel is planning to raise CPU prices, on the GPU side the opposite is happening. Last month, the great GPU shortage ended, thanks to the ongoing crypto crash. Crypto miners are flooding the market with cards that are no longer profitable, and that means newer GPUs are more readily available on the shelves. Nvidia has started bundling free games with some RTX 3080, 3080 Ti, 3090 and 3090 Ti cards.