CPU supply shortage escalates, Intel and AMD reportedly inform Chinese customers of extended delivery times

The demand for artificial intelligence creates a powerful siphoning effect on infrastructure. Following the shortage and price increase of storage chips, CPU chips are also facing supply shortages.

On February 6, foreign media reported that informed sources revealed that Intel and AMD have notified their 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.

The media cited a knowledgeable source stating that the tight supply has led to an average price increase of over 10% for Intel server products in the Chinese market, although specific prices may vary due to customer contract terms. Two other informed sources indicated that the Chinese market accounts for over 20% of Intel's total revenue, and the supply of Intel's fourth and fifth generation Xeon CPUs is particularly tight, with Intel implementing a quota delivery system.

A reporter from The Paper confirmed with the supply chain that a knowledgeable source stated that indeed, certain products are experiencing tight supply and require advance submission of market demand forecasts.

Global CPU chips are primarily supplied by Intel and AMD. Similarly, AMD is also facing CPU supply tightness. The aforementioned report stated that AMD has also informed customers of the supply constraints, with delivery times for some AMD products extended to 8 to 10 weeks.

Informed sources said that the two companies recently issued the above supply notifications to Chinese customers, indicating that the CPU supply shortage issue has further escalated, potentially increasing the production and operational pressure on domestic AI companies and many manufacturing firms.

The logic behind CPU shortages and price increases is similar to that of storage chips, as the continuous investment in artificial intelligence infrastructure, especially the significant demand for inference computing, has greatly increased the need for traditional computing CPU chips. Intel and AMD are shifting their products towards the AI field, leading to a chip shortage for consumer-grade terminals.

Intel pointed out in its earnings call in January that there are limitations in CPU supply. The first-quarter performance guidance provided by Intel fell short of expectations, with Intel explaining that due to chip supply shortages, it is difficult to meet customer demand. The main reason is that Intel's own chip manufacturing yield is low, and the proportion of available chip output in factories is insufficient, 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 to address this, and we anticipate that supply conditions will gradually improve from the second quarter through 2026."

Similarly, AMD's first-quarter performance guidance was also below market expectations, leading to a significant drop in stock prices. Although AMD has outsourced production to TSMC, the latter has prioritized capacity allocation for AI chip manufacturing, leaving very limited capacity for CPUs.

However, AMD stated that it has increased supply capacity to meet strong market demand. The company expressed in a statement to foreign media: "Based on our strong supplier agreements and supply chain established with partners like TSMC, we are confident in our ability to meet customer demand globally."In addition, the shortage of memory chips, which are key components of servers, has also played a role in exacerbating the situation. Distributors of server CPUs and memory products have indicated that after memory prices began to rise in the Chinese market at the end of last year, customers accelerated their CPU procurement to lock in lower memory prices.

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