Intel plans to raise chip prices

Chipmaker Intel has told its customers that it plans to raise prices on most of its semiconductor products later this year.

The company pointed to rising costs in its supply chain to justify the move. Nikkei first reported the price hike, which the company has since confirmed.

The inflationary measures will impact server CPUs, networking chips, consumer gear, and other parts of Intel’s sprawling empire.

Citing executives familiar with the matter, Nikkei reports that the price increases could range from single-digit changes to as much as 20 percent hikes.

Inflation and wider economic concerns are also set to dampen consumer electronics spending, risking turning a current semiconductor shortage into an oversupply – at least for some sectors. Data center servers, which remain in high demand and require the most advanced process nodes, are expected to continue to be in short supply for some time.

Intel customers Samsung, Acer, and Asustek have reduced orders from chipmakers as they fear a global economic downturn.

But the potential drop in demand and increase in prices comes just as Intel attempts to build out its own foundry business, developing non-Intel chips for other companies.

It hopes to build the largest semiconductor fab in the world in Ohio, but has delayed its groundbreaking after expected government subsidies have not yet materialized. And it hoped to fund its wider fab build out with the IPO of subsidiary Mobileye, but that too has not gone to plan – with the Israeli division delaying its stock market debut indefinitely until the market stabilizes. The Verge