Intel and AMD have warned customers in China of mounting shortages of server central processing units (CPUs) used to build a wide range of technologies, according to sources spoken to by Reuters. These constraints have reportedly pushed up lead times and prices, though not uniformly.
The two US-headquartered semi-conductor companies told their Chinese clients about the delays in recent weeks, Reuters noted. Intel’s customers spoke of a substantial backlog of unfulfilled orders in fourth- and fifth-generation Xeon CPUs, with some facing waits of as long as half a year. They also said prices for Intel’s server products in China were up by more than 10 percent in certain cases.
Intel told Reuters that it expected inventory to be at its lowest level in the first quarter of this year, with improvements from April. It blamed the shortage on the rapid adoption of artificial intelligence (AI), which was disrupting the broader supply chain with its far greater requirements for computing power.
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AMD has also notified Chinese customers of supply constraints, with delivery lead times for some products extending to eight to 10 weeks. It told Reuters it remained confident it would meet global customer demand “based on our strong supplier agreements and supply chain, including our partnership with TSMC [Taiwan Semiconductor Manufacturing Company].”
Intel and AMD dominate the global server CPU market, though Intel’s share has fallen sharply in recent years as AMD has gained ground. Intel currently supplies about 60 percent of the market, with China accounting for more than 20 percent of the company’s revenue, while AMD sits on 20 percent.
Reuters attributed the shortages to Intel’s manufacturing challenges, TSMC prioritising AI chip production for AMD, tight supplies of memory chips, and strong demand from more advanced agentic AI systems that require far greater CPU processing power than earlier forms.
