TLDR
- Intel and AMD have notified Chinese customers about significant server CPU supply shortages and delivery delays.
- Intel’s Xeon CPUs face severe shortages, leading to extended delivery times and price hikes by over 10%.
- AMD’s server CPUs also face supply constraints, with delivery delays of 8 to 10 weeks for some models.
- AI infrastructure demand and memory chip shortages have worsened the CPU supply issues.
- Intel dominates the server CPU market with around 60% share, while AMD faces increased demand but limited production capacity.
Intel and AMD have notified their Chinese customers of supply shortages for server CPUs. Intel, in particular, warned of delivery delays extending up to six months for its server products. According to Reuters, the shortages have caused prices for Intel’s server CPUs to rise by over 10%, depending on the customer contract.
Intel Struggles with Xeon CPU Shortages
Intel’s fourth- and fifth-generation Xeon CPUs have been in particularly short supply in China. As a result, the company has been rationing deliveries to meet the demand. Sources revealed that Intel’s backlog of unfulfilled orders has grown, leading to longer delivery timelines of up to six months.
The company has also faced persistent manufacturing yield challenges, hindering its ability to ramp up production. These constraints come amid booming demand, particularly driven by the growth in AI infrastructure investments. The rise of agentic AI systems, which require significant CPU power, has further strained supply.
Intel responded to these challenges by acknowledging strong demand for traditional compute in its recent earnings call. The company expects supply issues to improve by Q2 of 2026. “We are addressing these issues aggressively,” Intel stated, indicating that supply will stabilize over time.
AMD Faces Supply Constraints Amid Rising Demand
AMD has also informed clients of its own supply limitations, particularly for some of its server CPU models. While Intel’s backlog stretches up to six months, AMD’s delivery times have been pushed out to eight to 10 weeks. Despite these delays, AMD maintains that it has boosted its supply capabilities.
The company has partnered with Taiwan’s TSMC, the world’s leading contract foundry, which has prioritized AI chip production. This has left limited production capacity for AMD’s CPU needs. However, AMD has expressed confidence in its ability to meet global customer demand. “We remain confident in our supply chain and partnerships,” the company stated.
The CPU shortages have been further exacerbated by a memory chip shortage. Rising memory prices have prompted customers to accelerate CPU purchases to lock in lower prices for memory. This combination of CPU and memory shortages has created a critical situation for AI and server manufacturers.
Intel and AMD dominate the global server CPU market, with Intel holding around 60% of the share. However, both companies are struggling to keep up with the rapid growth in AI demand and the compounded challenges of the current supply chain.
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Source: https://blockonomi.com/intel-and-amd-face-supply-shortages-for-server-cpus-in-china/