Intel is reportedly preparing to raise personal computer CPU prices by 10% in October and may discontinue its low-margin Small Core product line. Intel shares surged more than 9% on the 8th, taking their year-to-date gain to 183%, while the Philadelphia Semiconductor Index also advanced. Supply chain sources attributed the move mainly to rising costs for memory chips, printed circuit boards and other components. Intel has raised PC CPU prices several times since late last year, while server CPU prices have also increased as strong artificial-intelligence data-center demand widens the supply-demand gap. RBC Capital Markets analyst Srini Pajjuri said shipments of Intel x86-based server CPUs are expected to grow 15% to 20% this year, with suppliers working to meet demand. He also said the supply chain expects High Bandwidth Memory, or HBM (memory designed for high-speed computing), prices to rise 80% to 100% next year. AI demand from chipmakers including Nvidia has already contributed to DRAM shortages and higher component prices. The PC market recovery remains weak: after discussions with Asian technology companies, Pajjuri described PC and smartphone conditions as weak but stable, with laptop production below normal and desktop demand particularly weak. The broader cost increase has put pressure on downstream brands, including Lenovo Group, whose shares fell more than 7% intraday on the 8th to HK$29.86, or approximately $3.8, on turnover of HK$527 million, or approximately $67.2 million. Investors are concerned that higher processor costs will reduce PC makers' gross margins when demand remains too weak for easy price pass-through. Intel is also reportedly planning a major product launch in March 2027 as it adjusts its product portfolio and pricing strategy amid competition from AMD and changes in AI computing architectures. Northland Securities upgraded Intel and raised its price target to $120, approximately NT$3,800, citing the server CPU shortage and potential benefits from Intel's Terafab collaboration with Tesla. Analysts said the pricing move reflects both cost pressures and pricing power in selected product lines. Rising agentic AI and AI inference demand is providing relatively clear visibility for server CPU demand, giving Intel scope to adjust its product mix and pricing despite continued weakness in PCs.