Question Intel preparing to raise CPU prices by as much as 20%, "due to inflation"

[GunsMadeAmericaFree]

According to a recent article in "The Street", Intel is preparing to raise prices on CPU's by as much as 20%, due to ongoing and increasing inflation.

Time to run out and buy that CPU you've had your eye on, in order to avoid a 20% jump in price?

 

[maddie]

This reminds me of a gamification mechanic that attempts to disguise a penalty as a reward: the user receives a bonus for doing certain actions on top of their default behavior, but the gain resulted by default behavior is lowered gradually. The end result is the user needs to work more for the same gains.

(If true) Intel's strategy seems similar, attempting to present a future price increase as a current price reduction. Seems like a bad idea until seen from a customer PoV:


Then again a business is not as impulsive as a retail customer, they know the risks involved with the scale of their operation. Could definitely lead to opposite results, especially if they smell weakness on Intel's part.

Yep, there is a reason why parts are oversupplied. Raising prices should lead to more of the same. Who thinks up these strategies?

 

[TheELF]

Who thinks up these strategies?

Click bait article writers, that's who!
Because the only thing intel did was to tell some customers "hey we will probably have to raise prices by a couple of percent" .
Everything else is thought up by click baiters to make their article more catchy.

 

[coercitiv]

Click bait article writers, that's who!

That "click-bait article" only voices what other press outlets were hinting. Here's what Nikkei Asia had to say on the matter:

Intel says the price hikes are required because of the surging costs for production and materials, the executives said. The percentage increases have not been finalized, and could be different for different types of chips, but are likely to range from a minimal single-digit increase to more than 10% and 20% in some cases, one of the people said.

But while rising costs of commodities, materials, shipping and labor have all heaped pressure on the chip industry, inflation has also clouded the outlook for consumer spending, making pricing decisions particularly fraught.

Demand for smartphones, PCs, TVs and game consoles weakened earlier this year, and device makers have indicated that inventories of unsold items are mounting.

Samsung Electronics has told suppliers of a range of its products to halt shipments.

Acer Chairman Jason Chen on Wednesday told reporters that his company is no longer suffering a chip shortage. "Some of the chip suppliers' CEOs even called me recently to buy more chips from them," he said. "The situation has changed."

 

[TheELF]

That "click-bait article" only voices what other press outlets were hinting. Here's what Nikkei Asia had to say on the matter:

Yeah exactly, what in that article shows any kind of strategy from intel trying to make people buy product now before prices rise?
The article says that samsung has issues and that demand for electronics in general reduced, but that's all.
For the OEMs, they sold so many things with older gens CPUs and GPUs during the high demand that there can be a sizable reduction in OEM without it affecting current output from any of the three (intel, nvidia, amd) .

 

[coercitiv]

Yeah exactly, what in that article shows any kind of strategy from intel trying to make people buy product now before prices rise?

The part that says the market has slowed down so hard that OEMs are now limited by demand and not supply, so they are limiting production in some cases. Supplier CEOs calling Acer and probably other OEMs to sell more chips. What if Intel is one of those suppliers? What if they were expecting to see very strong demand well into 2024? The information we have lines up with that Digitimes article, which means it is a scenario worth considering.

If Intel does indeed hold excess inventory, then announcing a price hike can be seen as a power move of sorts.

 

[maddie]

Yeah exactly, what in that article shows any kind of strategy from intel trying to make people buy product now before prices rise?
The article says that samsung has issues and that demand for electronics in general reduced, but that's all.
For the OEMs, they sold so many things with older gens CPUs and GPUs during the high demand that there can be a sizable reduction in OEM without it affecting current output from any of the three (intel, nvidia, amd) .

I though I was at least a bit intelligent, but, for the life of me, I can't seem to understand this at all.

"For the OEMs, they sold so many things with older gens CPUs and GPUs during the high demand that there can be a sizable reduction in OEM without it affecting current output from any of the three (intel, nvidia, amd)"

 

[jpiniero]

Don't forget about all those Chromebooks that were sold. I'd say it's comparable to the mining craze. And even though those were mostly 14 nm Atoms, they still need plenty of other chips including DDR4 memory.

I'd say that single handily caused any alleged chip shortage. The number is that massive.

 

[dlerious]

Like you Ranulf, I tend to agree, had an experience with a B450 board & upgrading bios to support 5000 series. Was a nightmare when booting after upgraded bios only to find locked out of entering the bios to change anything with a Zen+ cpu on it! Lucky for me the board could downgrade the bios though... saved my ass! Won't forget that experience any time soon.

I picked up the Crosshair Hero X370 partly because of the BIOS flashback option - glad I did. That option is on my list now when looking at motherboards and I'm glad to see it included on a lot more boards.

 

[DrMrLordX]

If Intel does indeed hold excess inventory, then announcing a price hike can be seen as a power move of sorts.

Gotta wonder what they're holding in excess?

 

[dnavas]

Bah.... im looking at next gen HEDT.
Price Hikes are probably the last thing im worried about.
Its more on HEDT availability if at all any.

Yeah. As a TR owner, I chortled morosely at "AMD credibility." Joe's blog post (https://community.amd.com/t5/busine...he-ultimate-workstation-processor/ba-p/530661) might as well have said words to the HEDT community that would get me banned on this forum, so, hey, message received (and as if they care, right back at them). We're stuck hoping that Intel will bring a reasonably priced system to market?

And let's be real, the issue is not inflation, it's gross margins -- time has not been kind to Intel. That's not inflation, that's a failure to compete. Even so, they're still minting a ridiculous amount of money and beating AMD -- despite the (deserved) decreases.

I fully expect the 7950X to MSRP just shy of twice current 5950X market pricing, and I expect RocketLake to take advantage by upping their prices and relying on brand name to make up whatever shortcomings there might be (if any). Personally, I'll wait -- the market is cyclical for a reason. Bullwhip incoming.(*)

[* I wish I could enjoy the schadenfreude, but honestly the likely outcome will be years of doom-n-gloom about the death of desktop on youtube (you've seen that for HEDT, yeah?), followed by a complete drought of products, until the geniuses at these companies finally come back to the strategy of delivering value. I fully expect this to be awful for everyone involved and am prepared to wait the better part of a decade, just like I did last decade. At least there might be some actual innovation happening during this round for a couple more years....]

 

[biostud]

I was hoping for aggressive pricing to keep zen4 prices down. 😛

But I wonder how a 13600k and 13700k will be priced and perform with DDR4, to compete with the AM4 platform.

 

[GunsMadeAmericaFree]

Like you Ranulf, I tend to agree, had an experience with a B450 board & upgrading bios to support 5000 series. Was a nightmare when booting after upgraded bios only to find locked out of entering the bios to change anything with a Zen+ cpu on it! Lucky for me the board could downgrade the bios though... saved my ass! Won't forget that experience any time soon.

My last Microstar/MSI motherboard would boot even without a CPU installed - allowing you to update the BIOS whether or not you had a supported processor in there. Hopefully they are all like that by now.......

 

[dlerious]

My last Microstar/MSI motherboard would boot even without a CPU installed - allowing you to update the BIOS whether or not you had a supported processor in there. Hopefully they are all like that by now.......

Not sure about the low end motherboards, but my mid tier Asus and Gigabyte boards have a bios flashback. Now if I could just get a diagnostic led and maybe start button on more motherboards - be nice if they didn't increase costs too much.

Edit: I'd definitely like to see something like the ASUS Q connect for the front panel.

 

[aigomorla]

I was hoping for aggressive pricing to keep zen4 prices down. 😛

But I wonder how a 13600k and 13700k will be priced and perform with DDR4, to compete with the AM4 platform.

it is aggressive pricing...
imagine the hell that breaks out when you tell the Significant Other when you tell her you need a new PC but everything is grossly marked up including the CPI (cost of inflation).

But at least we can blame Putin, because i think 2022 we are blaming everything on Putin.

 

[biostud]

it is aggressive pricing...
imagine the hell that breaks out when you tell the Significant Other when you tell her you need a new PC but everything is grossly marked up including the CPI (cost of inflation).

But at least we can blame Putin, because i think 2022 we are blaming everything on Putin.

She does not have say in my computer buying, so no problem. 😛

But as my current build is from 2014, I don't think I can be blamed for overspending on that account.