DigiTimes recently reported that Intel is suffering from an oversupply problem with its more prominent processors and wants to limit the supply soon. The company has revealed strategies to increase the price of CPUs shortly to force computer vendors to purchase larger quantities immediately. The power play by the company seems relatively aggressive in blatantly stating, "You better purchase our CPUs while you can buy at the current price because this is your last chance." While not a new business strategy, the effect of Intel pressuring vendors will reduce sales several months later.
Intel pressures vendors with looming price hikes to oversupply their current stock of Intel CPUs
Sources for Digitimes are unsure of Intel's success with the aggressive strategy but are stating that we should begin to see cost increases as soon as the fall season for processors and Wi-Fi chips. Intel's current plan for success will require both vendor's needs and own strategies, as well as calculating the amount of overstock they can maintain.
There is also clear speculation that Intel's increasing price strategy for their processors will affect DIY and OEM markets and the reported mobile markets. Intel has planned to increase mobile processors to help resolve part of the market inflation and has taken the necessary precautions to contact consumers about the changes. Nothing may be safe from Intel's price adjustments.
DigiTimes estimates show that notebook volumes this next quarter will increase 14.3% due to a lack of demand during the second quarter of 2022. Intel also used COVID restrictions in China for the lower market. The marketplace is also about to see a significant change in the next several weeks as back-to-school retail seasons are about to begin before the holiday season at the end of the year. Apple, HP, and more are expected to see a flux in the marketplace, with Apple seeing a 43% increase and HP a 25% increase in shipments from the material shortages seen during the second quarter.
Intel is not the only company that has attempted a strategy recently, as AMD made a similar approach at the end of last year. Unfortunately, Disgust met AMD with vendors who declined the plan from the company, and AMD had to keep pricing the same. Intel continued to keep prices low, but it appears they can no longer maintain that cost stance.
Prices on CPUs are expected to increase at the end of this year, but Intel may not raise prices after all, depending on many different elements. Intel may want to keep costs down to eliminate older processors to make room in the market for next-gen CPUs. Right now, everything is speculation and estimations, so there is no true answer to what Intel may or may not do at this point. Lastly, Raptor Lake processors from the blue team are expected to launch shortly.
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