In October, PC CPU prices are expected to rise by another 10%. Investment bank Northland has upgraded Intel Corporation (INTC.US) to "Outperform": server shortages have granted pricing power.

Investment bank Northland Securities has upgraded Intel Corporation (INTC.US) from In Line With the Market to Outperform, with a new target price of $120. According to supply chain sources, Intel Corporation is expected to raise prices of its CPUs for PCs by about 10% again on October 5, 2026. Stimulated by rumors of product price increases, Intel Corporations stock price rose by over 5% in pre-market trading. Analyst Gus Richard noted that the company has made substantial progress in its transformation process. He also pointed out that Intel Corporation may continue to benefit from the persistent shortage of server CPUs. Additionally, Intel Corporations collaboration with Tesla, Inc. on the Terafab semiconductor project is expected to bring significant benefits to its foundry business. Sources in the supply chain revealed that Intel Corporations CPU for PCs is expected to increase in price by 10% once again on October 5, 2026. Meanwhile, the lower-margin small-core product line may initiate a phase-out (EOL). Optimizing the profit structure by cutting unprofitable products is the core strategy of Intel Corporation's CEO Pat Gelsinger in this round of strategic adjustments. Since the end of 2025, Intel Corporation has continuously raised CPU prices for PCs due to surging overall costs. In the first quarter of 2026, prices were raised by about 10%, and in July, adjustments were made for some consumer and server CPUs, with price increases ranging from tens to thousands of dollars per unit. Industry estimates suggest that global PC shipments in 2026 will be about 260 million units and may slightly decline to 250 million units in 2027. The core reason is not a significant drop in PC demand but rather the recent noticeable price increases in components such as memory and PCBs, leading to accumulating cost pressure on complete end products. In 2026, PC manufacturers still have some low-cost old inventory to absorb the pressure from component price increases, limiting the extent of price increases for the full systems. However, by 2027, products utilizing a new round of high-priced components will be mass-produced, further highlighting the price increase pressure for PCs, which may suppress users' willingness to upgrade their devices. Against the backdrop of expectations for a slight weakening of the PC end market in 2027, Intel Corporation's choice to raise CPU prices underscores that boosting gross margins is the top priority; the previous strategy of competing for market share through price cuts is no longer applicable. Industry insiders revealed that if Intel Corporation reduces its low-margin small-core product line, the impact is likely to be felt not by mainstream PCs, but by industrial computers (IPC), the Internet of Things (IoT), and embedded markets with longer life cycles. Once this demand is released, companies like Qualcomm and MediaTek from the Arm camp may seize the opportunity, especially in the IPC, edge computing, and IoT markets, where Arm SoCs offer high integration and low power consumption advantages. The server CPU business is more challenging with sustained capacity tightness. Recent reports indicate that compared to the PC CPU business, server CPUs are currently a more daunting sector for Intel Corporation, which is facing a continued shortage of server CPUs. Company management previously predicted that server CPU shipments would maintain double-digit high growth from 2026 to 2028, with the prosperous cycle extending until 2028. The supply chain indicates that Intel Corporation's self-owned wafer fab capacity is prioritized for server CPUs, which have a higher gross margin than the foundry portion of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Even so, the server CPUs remain in tight supply, squeezing the capacity available for PC CPUs. If Intel Corporation wants to further expand its server CPU business, it may have to delegate some orders to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for foundry services. Wedbush Securities analyst Matt Bryson previously stated that the continuous shortage of server CPUs gives Intel Corporation the pricing flexibility to raise prices without harming demand. He noted that the key issue now is not whether Intel Corporation can raise prices, but where the price increases will take place. Given that server chips account for a more significant proportion of Intel Corporation's business, a widespread price increase would mean that Intel Corporation is regaining pricing power for the first time in years, reflecting the tight supply situation.