Intel, AMD warn China customers of long CPU delivery delays

Intel and AMD have warned customers in China about growing supply shortages for server processors, with some Intel CPU orders now facing delivery delays of up to six months.

According to people familiar with the situation, the two chip giants have recently notified Chinese clients about extended lead times, highlighting intensifying pressure across the global semiconductor supply chain, News.Az reports, citing Reuters.

Intel’s server CPUs are seeing the most severe delays. Some models, including fourth- and fifth-generation Xeon chips, are reportedly in especially short supply, with the company rationing deliveries and facing a large backlog of unfulfilled orders. The shortages have also pushed prices higher, with Intel server products in China costing more than 10% more on average, though pricing varies depending on contracts.

AMD is also experiencing supply constraints. Some of its products now have delivery lead times stretching to roughly eight to 10 weeks, according to sources.

The shortages are being driven largely by surging demand linked to artificial intelligence infrastructure. The global rush to build AI data centers has sharply increased demand not only for specialized AI chips but also for traditional server processors and memory components.

Intel said rapid adoption of AI technologies has increased demand for “traditional compute,” contributing to inventory pressures. The company expects inventory to hit its lowest level in the first quarter but said it is working aggressively to improve supply, with recovery expected during the second quarter of 2026.

AMD said it remains confident in meeting global customer demand, citing strong supplier agreements and its manufacturing partnership with Taiwan Semiconductor Manufacturing Company (TSMC).

China accounts for more than one-fifth of Intel’s total revenue, making the shortages particularly significant. Major customers in the country include leading cloud providers and server manufacturers.

Intel and AMD together dominate the global server CPU market, though the competitive balance has shifted in recent years. Intel’s market share has dropped significantly since 2019, while AMD has steadily expanded its presence.

Several factors are contributing to the supply crunch. Intel has faced ongoing manufacturing yield challenges, while AMD relies on outsourced production from TSMC, which has prioritized manufacturing high-demand AI chips.

Meanwhile, rising memory chip prices have triggered additional demand for CPUs. Some customers accelerated purchases to secure lower memory costs before further price increases, further tightening supply.

The growing use of advanced AI systems capable of handling complex, multi-step tasks has also increased processor demand, putting additional strain on global semiconductor production capacity.

News.Az 

By Aysel Mammadzada