Rises succeed each other and the announcement from Intel last week is now echoed by AMD, which indicates that it wants to increase the price of its chips by 15% compared to the year 2025.
Increasing by 15% doesn’t mean that the chips marketed by AMD will only be sold for 15% more at retail. This increase will undoubtedly have multiple ripple effects. This is the recommended selling price by AMD, but in this kind of scenario, the prices in stores are always quite spectacularly higher. Especially because wholesalers do not necessarily change the budget allocated to the purchase of chips. With a 15% increase, it’s 15% fewer chips, and therefore fewer processors distributed to retailers. Again, those who put the most on the table or make the largest order will be delivered, and with fewer offers, prices will also change.
One of the main side effects of this ongoing component crisis is that customers are withholding their investments. Between RAM, processors, and the rest, prices have skyrocketed. Another problem is the scarcity of certain products such as memory, making many investments impossible. This sharply plunges hardware sales.
Integrators like Lenovo, HP, Dell, and others will see their prices increase to some extent while facing a decrease in their sales, which will push them to want to compensate for the erosion of their revenue. Not only will the chips directly sold in stores become more expensive, but even pre-built machines like laptops or desktop PCs will end up significantly higher than prices in 2025. For a buyer, this means having to bear the increase in memory, storage, and processor in addition to the increase in transportation costs, which will start to be felt due to the conflict in Iran. The final bill for buying a complete machine will be compared to that of 2025.
From the end of the month, Intel and AMD prices will increase. The deadlines will also lengthen as the focus of production of the two manufacturers increasingly shifts towards the server world. There used to be a two-week lead time between ordering and receiving a batch of processors in the same period in 2025. Today, it takes ten to twelve weeks for the same result. A deadline that has become incompressible and very problematic for manufacturers who now have to make impossible bets.
Increasing prices and deadlines: the right recipe for failure
Imagine having to launch a product for the back-to-school season in September. By ordering processors in April, you’ll receive them in June. You will only have July and August to gather the pieces, start production, test, pack, ship, and distribute the hardware to retailers. Machines ready to be shipped for early September usually start to be stocked by retailers at the beginning of August, at worst by the 15th of the month. Many purchases are made during back-to-school shopping with school supplies, which leaves only June and July for manufacturing. And even then, we only count on July if we accept fast transport by air, which further increases the machine’s price.
Adding to this is the risk of mispricing. If you want to develop a laptop for delivery in 12 weeks, you need to anticipate the price of memory and storage for that period, which is currently absolutely impossible. Buying before a memory price drop would disqualify your hardware, but ordering memory today, betting that it will increase in the next 12 weeks, is also very risky.
On the MiniPC market, everyone is feeling blue. The machines have already changed significantly in price. But especially the most affordable components have almost disappeared from the catalogs. It is impossible to get, even at a higher price, basic chips from AMD and Intel. Some are resorting to alternative chips, while others are simply cutting back on their orders.
And every passing week seems to further complicate the situation.
Pricing up and availability down, the processor market is getting more complicated
