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A leaker has published what they claim to be a notification from Infineon to its customers about upcoming price hikes on various power management chips. If the letter is legitimate, then the new prices will be applied starting April 1, which will eventually have a ripple effect across the whole electronics supply chain as power ICs are used by all electronic devices.
@QQ_Timmy on Thursday published what they claim to be an Infineon letter to clients notifying them of shortages and price increases on several power switches and ICs. The letter — which is signed by chief marketing officer Andreas Urschitz — claims that the company needs to expand its production capacity in advance to meet demand from the AI sector and other customers. As a result, the company has to adjust the prices of its power switches and ICs starting April 1, 2026.
"We will start applying the new price on April 1, 2026," the alleged letter from Infineon reads. "All new orders placed on or after this date, as well as any existing backlog shipping on or after April 1, will reflect the revised pricing. Be assured that Infineon will take any needed further proactive action to support your growth in a constrained market."
If the letter is genuine, then the company stressed that it could no longer absorb increasing costs and had to pass them along to its clients. It also allegedly took all actions to minimize price hikes.
Power switches and power management ICs convert and regulate power before it reaches actual chips in virtually all electronic devices. Such chips are used pretty much everywhere, including power supplies as well as voltage regulator modules on motherboards and add-in-cards (or AI accelerator modules). In datacenters, such ICs are widely used in rack-level power distribution systems, HVACs, cooling systems, and other infrastructure components. In addition, they are used in electric vehicles, industrial motor drives, renewable energy systems, and a variety of other devices that span from keyboards and mice all the way to displays and laptops.
Because power ICs for various devices are produced at the same fabs, demand for one type of power chip can affect the availability of other types of power ICs, and if their producers need to speed up expansion of production capacity, it affects the costs of all products. As a result, increased quotes for power ICs will affect the bill-of-materials of multiple products, not only AI servers (that use hundreds of them), but also humble desktop PSUs, motherboards, and displays. How significantly Infineon's price hikes may affect the prices of actual consumer electronics is something that remains to be seen, as some companies will absorb cost increases, whereas others will not.
The letter is generally grammatically correct and professionally written, but there are a few minor wording or grammar issues that make it read like German-influenced corporate English. The latter is common in European semiconductor communications as German companies play a big role in the region. That said, the letter is most likely genuine, though Infineon has not publicly admitted its existence.
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Every tech company is trying to make the most of this bonanza. Increasing price now is a norm and don't need to try hard to substantiate it. Just point their finger to AI and that is good justification to increase price. So no surprises here. But as more and more do this, the discontentment with wasteful AI investments will just keep increasing.
