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Intel, AMD notify customers in China of lengthy waits for CPUs
Intel and AMD have notified Chinese customers of supply shortages for server central processing units (CPUs), with Intel warning of delivery lead times of up to six months, people with knowledge of the delays said.
The supply constraints have driven up prices for Intel's server products in China by more than 10% generally, although pricing varies by customer contract, according to one of the people.
Booming investment in artificial intelligence infrastructure has created a frantic rush not only for AI-specific chips, but also other parts of the supply chain - most acutely in memory chips, prices of which continue to soar.
These latest notices to Chinese customers, which the sources said were made in recent weeks, indicate that CPU shortages have also intensified. That could compound challenges for AI companies as well as many other manufacturers.
Backlogs of unfulfilled orders
In China, which accounts for more than 20% of Intel's overall revenue, its fourth- and fifth-generation Xeon CPUs are in particularly short supply, with Intel rationing deliveries, two of the people said.
Intel has a substantial backlog of unfulfilled orders for these models, with delivery times extending as long as six months, they added.
AMD has also informed clients of supply constraints, said one of the people and a third source. Delivery lead times for some AMD products have been pushed out to eight to 10 weeks, the third source said.
The extent of the supply contraints in China is being reported by Reuters for the first time.
Intel, which flagged CPU supply constraints in its earnings call in January, said in a statement to Reuters that the rapid adoption of AI had led to strong demand for "traditional compute".
The company expects "inventory at lowest level in Q1, but we are addressing aggressively and expect supply improvement in Q2 through 2026," the statement said.
AMD reiterated remarks in its earnings call that it has boosted its supply capabilities to cope with strong demand.
"We remain confident in our ability to meet customer demand globally based on our strong supplier agreements and supply chain, including our partnership with TSMC," it said in a statement to Reuters.
Dominant market share for CPUs
The two companies together dominate the global server CPU market. Intel has seen its market share decline from over 90% in 2019 to about 60% in 2025, while AMD's share has climbed from around 5% in 2019 to more than 20% last year, according to a UBS report in January.
In China, clients include major server manufacturers and cloud computing providers such as Alibaba and Tencent.
The CPU shortages stem from multiple factors.
Intel has struggled to ramp up production amid persistent manufacturing yield challenges. AMD outsources production to Taiwan's TSMC, the world's top contract foundry, which has prioritized AI chip manufacturing and left limited capacity for CPUs.
Additionally, the shortage of memory chips - also a key server component - has played a role. When memory prices began rising late last year in China, customers accelerated purchases of CPUs to lock in lower prices for memory, said the third source, a distributor who sells both server CPUs and memory products.
Surging demand for agentic AI systems - which perform complex, multi-step operations beyond simple chatbot functionality - has further strained supply. These advanced applications require significantly more CPU processing power than traditional workloads.
Source: EconomicTimes
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