CPU supply shortage worsens, Intel and AMD reportedly inform Chinese customers of delivery delays

Artificial intelligence’s strong demand for infrastructure has created a siphoning effect. Following the shortage and price increase of storage chips, CPU chips are also facing supply shortages.

On February 6, according to foreign media reports, sources revealed that Intel and AMD have notified Chinese customers of supply shortages for their server central processing units (CPUs). Intel also warned that future delivery times could extend up to six months.

Media outlets quoted an insider as saying that supply tightness has led to an overall price increase of over 10% for Intel server products in the Chinese market, though specific prices may vary depending on customer contract terms. Two other insiders also stated that the Chinese market accounts for more than 20% of Intel’s total revenue, and the supply of its fourth and fifth generation Xeon CPUs is particularly tight. Intel is implementing a quota-based delivery system.

A reporter from The Paper contacted the supply chain for verification. An insider said that indeed some products are in tight supply and require advance submission of market demand forecasts.

Global CPU chips are mainly supplied by Intel and AMD. Similarly, AMD is also facing CPU supply tightness. The aforementioned reports indicate that AMD has also informed customers of limited supply, with delivery times for some AMD products extended to 8 to 10 weeks.

Insiders said that both companies recently issued the above supply notices to Chinese customers, which also means that the CPU shortage problem has further escalated, potentially increasing the operational pressure on domestic AI companies and many manufacturing firms.

The logic behind CPU shortages and price hikes is similar to that of storage chips. As AI infrastructure investments continue to grow, especially with the increasing demand for inference computing, traditional CPUs are under significant pressure. Intel and AMD are shifting their products toward AI applications, leading to shortages in consumer-grade terminals.

In January, Intel mentioned during its earnings call that CPU supply was constrained. Intel’s Q1 earnings guidance fell short of expectations, and the company explained that the shortage was due to difficulty in meeting customer demand. The main reason is Intel’s low chip manufacturing yield, with insufficient usable chip output from its factories, directly limiting delivery capacity.

Intel stated: “We expect inventory levels to be at their lowest in the first quarter, but we are actively taking measures. We anticipate supply conditions will gradually improve from Q2 through 2026.”

Similarly, AMD’s Q1 earnings guidance also fell below market expectations, causing a sharp drop in its stock price. Although AMD outsources manufacturing to TSMC, the latter has prioritized capacity for AI chip production, leaving very limited capacity for CPUs.

However, AMD has announced that it has increased supply capacity to meet strong market demand. The company stated to foreign media: “Based on our strong supplier agreements and supply chain relationships with TSMC and others, we are confident in our ability to meet customer needs worldwide.”

Additionally, the shortage of memory chips, a key component for servers, has also contributed to the situation. Distributors of server CPUs and memory products reported that after memory prices in the Chinese market began rising at the end of last year, customers accelerated CPU procurement to lock in lower memory prices.

Source: The Paper

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