Wedbush: Continuous shortage of server CPUs, Intel still has room for price increases

Investment bank Wedbush recently released a report indicating that, given the ongoing supply-demand imbalance in the server CPU market, Intel still has room to further increase processor prices this quarter without significantly impacting market demand.

Intel has recently confirmed price increases for some consumer-grade and server-grade CPUs, primarily involving the Core Ultra 200S Plus consumer processors and the Xeon 6 and Xeon 8000 series server processors. The price increase for consumer-grade processors ranges from $30 to $50, while data center-grade products have seen increases of several hundred to even over a thousand dollars. Intel stated that the price adjustments are based on changing market dynamics and ongoing monitoring of the supply chain and related costs.

Wedbush analyst Matt Bryson wrote in the report that, given the continued shortage of server CPUs, particularly for specific models, he believes Intel still has room to raise prices without affecting demand. However, he also pointed out a key question regarding whether the actual procurement prices for OEMs have also increased in tandem, or if Intel has only adjusted prices in the distribution and retail channels, which represent a much smaller proportion of Intel's overall business.

Driven by the explosive demand for data center server CPUs and the progress in chip foundry business, Intel, which has been struggling for the past few years, has regained favor with investors, with its stock price rising nearly 200% year-to-date. Analysts believe that the demand for computing power brought about by AI is changing the long-standing pricing logic of the traditional CPU market, which has historically only seen prices decrease