Intel Begins Informing Customers About Price Hike Plans of Chip Products

Intel Corp said on Thursday it has started informing customers of its plan to raise prices for many of its chip products due to rising costs, a move that the company had first hinted in its first-quarter earnings call on April 28. The price increases could come into effect in autumn and the percentage increases are likely to range from a minimal single-digit increase to more than 10 percent and 20 percent in some cases, Nikkei reported. While the price hikes have not yet been finalised yet, it could cover Intel's flagship products such as central processing units for servers and computers, as well as items including chips for Wi-Fi and other connectivity, the report said on Thursday.

Intel's move comes amid a supply-chain crisis triggered by the global pandemic that has deprived makers of personal computers and smartphones to cars of computer chips needed to make their products.

Last month, it was reported that Intel has frozen hiring in the division responsible for PC desktop and laptop chips, according to a memo reviewed by Reuters, as part of a series of cost-cutting measures. Intel is "pausing all hiring and placing all job requisitions on hold" in its client computing group, according to the memo sent on Wednesday. The memo said that some hiring could resume in as little as two weeks after the division re-evaluates priorities and that all current job offers in its systems will be honoured.

"We believe we are at the beginning of a long-term growth cycle across the semiconductor industry, and we have the right strategy in place," Intel said in a statement. "Increased focus and prioritisation in our spending will help us weather macroeconomic uncertainty, execute on our strategy and meet our commitments to customers, shareholders, and employees."

© Thomson Reuters 2022