Intel is getting ready to increase the prices of its CPUs and chips. Nikkei reports that the chip maker will raise prices on its flagship CPUs and a wide range of other chips later this year, including Wi-Fi and other connectivity chips. Intel has already informed its customers of the price increases, and it will likely lead to more PC and laptop price increases during the holiday period.
Nikkei reports that pricing hasn’t been finalized, but some chips could go up by 20 percent. Intel already warned earlier this year that it was looking at price increases for certain chips, due to ongoing inflation and the rising costs of materials, shipping, and labor. “On its Q1 earnings call, Intel indicated it would increase pricing in certain segments of its business due to inflationary pressures,” says an Intel spokesperson in a statement to Nikkei. “The company has begun to inform customers of these changes.”
The price increases are set to take place just as PC shipments experienced a big decline, and inflation is already impacting average selling prices of PCs, according to the Verge. Gartner revealed this week that worldwide PC shipments dropped nearly 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 “steep downturn in demand for Chromebooks” on the PC decline. The PC market experienced phenomenal growth during the first two years of the pandemic, but the mix of energy, fuel, and food price increases, and people spending less time at home has brought the PC market back to reality.