Some chip prices could jump by 20 percent
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. 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.
The PC market across Europe, the Middle East, and Africa saw an even bigger 18 percent decline, according to Gartner. “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 wobbling and Intel gets ready to raise CPU prices, the opposite is happening on the GPU side. The great GPU shortage ended last month, thanks in part to the ongoing crypto crash. Crypto miners are flooding the market with cards that are no longer profitable, and it means new GPUs are more readily available on shelves. Nvidia has started bundling free games with some RTX 3080, 3080 Ti, 3090, and 3090 Ti cards. We’ve even seen a (temporary?) price drop of $400 for the RTX 3090 Ti, and even price drops for some RTX 3080 cards.
If you’re thinking about building a gaming PC or buying one pre-built, now seems like an ideal time during the GPU price drops, and ahead of CPU price increases. But we’re about to enter another era of CPU and GPU upgrades, particularly with Nvidia’s new 40-series GPUs reportedly set to be arriving in the coming months. So if you really want the latest and greatest, it might be worth holding off to see what Nvidia, AMD, and Intel have planned for later this year.
