After posting a disastrous Q2 2022 earnings report, Intel has confirmed that it will be raising prices on all major components including CPUs.
Intel Confirms Components Price Hike Including CPUs, Taking Effect From Q4 2022
During its Q2 2022 earnings call, Intel reported that it has missed both Revenue and EPS targets by double-digit percent. Both, Intel's Client Computing and Datacenter segments saw a huge downfall in terms of revenue and while the company reiterates that they are trying to do better and have a very good set of products coming out in the second half of 2022, Chipzilla will issue a price hike on the majority of those components including CPUs.
I'd say the other thing is we've got a good set of products coming out over the course of the second half of the year. And I think we're kind of operating with the wind at our sails in terms of product offerings in all of our businesses. And then third, we are increasing pricing, and pricing generally takes effect in the fourth quarter. We've done a fair amount of time.
We also will see more pricing improvement in CCG than DCAI. They're both -- we're adjusting pricing, but the pricing is more significant in CCG. And so that also gives CCG a lift in the later part of the year.
David Zinsner -- Chief Financial Officer at Intel via The Motely Fool
The price hike has been in the talks for months now with previous reports claiming that Intel will be increasing the price of CPUs and other components by up to 20%. The affected product list includes CPUs for client computing servers along with a list of other components such as Wi-Fi connectivity controllers.
These three CPUs and chip segments are the majority of Intel's business and the company expects price hikes from single-digit, up to 10-20% on certain products. The prices have not been finalized yet but Intel has communicated with its partners and customers to prepare for the price hike. This report also highlights flagship CPU products for client computing and we know that the blue team is going to launch its brand new 13th Gen Raptor Lake Desktop and Notebook CPUs by Q4 2022 & Q1 2023, respectively. It is likely that we may see a slightly higher price on these components when they are introduced to the public.
As to why Intel is favoring a price increase right now, there are two reasons and both are conflicting with each other. One report states that to resolve its overstock issues, Intel has begun circulating news about the price hike to its partners so that they can buy the stock before these components become more expensive. Another report states that this is due to surging costs for production and expensive materials that are used in the creation of Intel's chips. This price hike also aligns with the inflation surge, not only within the US but globally which has led to consumer product prices being hiked by up to 9.1% in June, a 40-year record.
The Blue Team hasn't clarified yet but the price hike will take effect starting Q4 2022 and will affect the majority of Intel's components which include CPUs. We will keep you posted once we get more information.
