Intel tightens price screw: Old Raptor Lake CPUs to become more expensive in the fourth quarter

The rumors are intensifying: Intel is apparently planning to raise prices for its Raptor Lake processors by more than 10 percent in the fourth quarter. This corresponds to a surcharge of around 20 US dollars on models that are currently priced at around 150 to 160 US dollars. This comes at an inopportune time for PC manufacturers: they are already struggling with rising DRAM and SSD costs, while customer demand is lagging far behind expectations.

Interestingly, the price round does not affect the latest Lunar Lake models, but the penultimate generation of all things. The Raptor Lake chips introduced in 2022 are still in demand in the mid-range – not least because the new products marketed as AI PCs are sitting on the shelves like lead. Although manufacturers such as Lenovo and Acer report a growing share of AI PCs, in practice there is still a lack of killer apps that offer a real incentive to buy. For many customers, the price remains the dominant argument. And that speaks against more expensive new developments. The situation is coming to a head: prices for PC components such as DRAM (especially DDR4) and SSDs have been rising dramatically for months. The background to this is the shift in production by many semiconductor manufacturers towards high-bandwidth memory (HBM) for AI and data center applications. Now also on the CPU side: If Intel does indeed raise prices, this would drive up the overall costs for system integrators even further. In an already weak market environment, this would be a double-edged sword: higher prices could save margins – or completely stifle demand.

One possible explanation: production capacities for Raptor Lake are scarce, partly because Intel has outsourced parts of production to TSMC. At the same time, Lunar Lake and its AI focus are currently generating little revenue. So the price of the classics is being tightened. One industry insider puts it in a nutshell: “If the new doesn’t sell, you milk the old.” In the past, a new Intel generation automatically meant the starting signal for a PC refresh on the market. With its IDM (Integrated Device Manufacturing) strategy, Intel had the entire production flow under control. Today, things are different: AMD has long been producing exclusively at TSMC, while Intel is also beginning to outsource. This leads to a decoupling of model generation and product availability. Old chips remain on the market for longer, continue to be produced – and could now even become more expensive.

Conclusion: When discount battles become a math problem

This is bad news for OEMs, especially in the run-up to high-selling events such as Black Friday or Singles’ Day. Without attractive purchase prices, the scope for promotions, bundles and discount offers shrinks. And while Microsoft is hoping for a modernization boom with the approaching end of Windows 10, consumer interest remains rather lukewarm. Should Intel really take this step, it would be less an economic optimization than a diplomatic capitulation to a market that writes its own rules.

Source: DigiTimes