Intel Is Prepared to Raise Chip Prices: The Company's Stock Is Rising While the Market Is Falling
Intel may discontinue production of its low-cost Atom-series processors, industry sources told a Taiwanese publication
Intel May Raise Prices on PC Chips by 10% as Early as Next Month / Photo: InFocus.ee / Shutterstock.com
Chipmaker Intel is considering raising prices for PC central processing units by 10% in October, according to the Taiwanese technology publication DigiTimes, citing industry sources. Intel's stock jumped nearly 10% during trading on August 8; MarketWatch attributes this rise to reports of the company's plans to raise prices.
Details
According to DigiTimes, which cites industry sources, prices for Intel PC processors have been rising since late last year due to increased costs throughout the supply chain, including for components such as memory chips and printed circuit boards. These same factors have led to higher prices for server processors, which are in high demand from data centers for artificial intelligence.
Additionally, according to DigiTimes, Intel may discontinue the production and sale of Small Core products, including solutions from the Atom family, which are used primarily in industrial computers and Internet of Things devices. These products have lower profit margins and, as a result, generate less profit for the company, MarketWatch explains.
Intel did not respond to MarketWatch's request for comment.
Wall Street is responding positively to Intel’s ability to raise prices: on Tuesday, the company’s stock rose 9.9% to $105.3. Meanwhile, the S&P 500 fell 0.36% on Tuesday, and the tech-heavy Nasdaq Composite lost 0.13%. The VanEck Semiconductor ETF, which tracks the semiconductor sector, rose 1.6% on September 8.
What's Happening in the Market
The PC and smartphone markets appear “weak but stable,” noted RBC Capital Markets analyst Shrini Pajuri in a note to clients on Monday, according to MarketWatch. He cited conversations with representatives of Asian technology companies. According to Pajuri, laptop production is proceeding more slowly than usual, and demand for desktop computers appears “particularly weak.” At the same time, shipments of Intel x86-based server processors could grow by 15–20%, Pajuri estimates, as manufacturers ramp up supply in an effort to catch up with demand.
According to Pajuri, supply chain participants expect prices for high-bandwidth memory (HBM) to rise by 80–100% next year. Demand for HBM from chipmakers such as Nvidia, driven by the development of AI, has contributed to a shortage of dynamic random-access memory (DRAM) and rising prices for these components.
This article was AI-translated and verified by a human editor
