Intel hikes prices for many of its chip products

Intel has started informing customers of its plan to raise prices for many of its chip products due to rising costs, Nikkei news report said.
Intel PC chips at trade show
The price increases could come into effect in autumn and the percentage increases are likely to range from a minimal single-digit increase to more than 10 percent and 20 percent in some cases.

The price hike 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.

Intel’s move comes amid a supply-chain crisis triggered by the global pandemic that has deprived makers of personal computers and smartphones to cars of computer chips needed to make their products.

Intel CEO Pat Gelsinger during the latest analyst call announcing the earnings report said the company would remix the products to higher price points.

Intel CFO Dave Zimmer earlier said the world’s #1 chip maker was looking for targeted price increases in certain segments.

Intel, in a statement to Nikkei Asia on Thursday, said: “On its Q1 earnings call, Intel indicated it would increase pricing in certain segments of its business due to inflationary pressures. The company has begun to inform customers of these changes.”

Intel’s Asian peer Taiwan Semiconductor Manufacturing (TSMC), the world’s biggest contract chipmaker, has told clients it will raise prices by a single-digit percentage starting in 2023, less than a year after its largest price increase in a decade.

China’s Semiconductor Manufacturing International (SMIC), a smaller chipmaker, also told investors that it will reflect rising costs of materials by raising its prices, since otherwise the increased production costs would erode its gross margin by 10 percent.

Suppliers of chip materials such as Shin-Etsu Chemical, Sumco and Showa Denko have told clients they will increase prices by at least 20 percent.

Doris Hsu, CEO of GlobalWafers, the world’s No. 3 wafer material maker, also recently confirmed it was raising prices for chipmaking customers.