TLDR
- Intel (INTC) and AMD (AMD) alert Chinese customers about server CPU shortages with Intel delays up to six months
- Intel server CPU prices in China increase more than 10% as company rations Xeon processor deliveries
- AMD delivery lead times stretch to 8-10 weeks for select products due to TSMC capacity constraints
- Intel holds substantial backlog of unfulfilled orders for fourth and fifth-generation Xeon CPUs in China market
- AI infrastructure investment boom creates demand surge for traditional computing power and memory chips
Intel and AMD have notified customers in China about server CPU supply shortages. Both companies sent alerts to Chinese clients in recent weeks. Intel warned some customers about delivery waits extending up to six months.
The chip maker has built a backlog of unfulfilled orders for its processors. AMD informed clients to expect delivery times of eight to 10 weeks for certain products. The supply issues have driven up costs for Intel’s server products.
Intel’s server CPUs in China now cost more than 10% higher than previous pricing. Pricing varies based on individual customer contracts. China accounts for over 20% of Intel’s overall revenue.
Intel’s fourth-generation and fifth-generation Xeon CPUs experience the most severe shortages. The company rations deliveries to customers due to limited inventory. Sources confirm Intel maintains a large backlog of orders awaiting fulfillment.
AI Growth Strains Computing Resources
Artificial intelligence infrastructure investment has created demand across the chip supply chain. Companies are racing to build AI systems and expand data centers. This rush has increased need for AI-specific chips and traditional computing components.
Memory chip prices continue climbing as supply fails to keep pace with demand. CPU shortages create additional obstacles for AI companies and manufacturers. Intel pointed to AI adoption as driving strong demand for traditional compute power.
The company expects inventory levels to bottom out in the first quarter of 2026. Intel plans supply improvements through the second quarter and rest of 2026. The chip maker stated it is working aggressively to resolve constraints.
AMD said it has increased supply capabilities to handle robust demand. The company maintains confidence in serving customers globally. AMD referenced its strong supplier agreements and Taiwan Semiconductor Manufacturing Company partnership.
Production Challenges Limit Output
Intel struggles with manufacturing yield issues at its production facilities. These challenges have restricted the company’s ability to boost production. AMD outsources chip manufacturing to TSMC.
TSMC has focused production capacity on AI chip manufacturing. This prioritization leaves reduced capacity for CPU production. The two companies control most of the global server CPU market.
Intel’s market share fell from over 90% in 2019 to about 60% in 2025. AMD’s share climbed from roughly 5% in 2019 to more than 20% last year. Chinese customers include major server manufacturers and cloud computing providers.
Alibaba and Tencent count among the companies affected by the shortages. Memory chip constraints have influenced customer purchasing behavior. When memory prices started rising late last year, customers bought CPUs earlier.
This strategy allowed customers to secure better pricing on memory components. Advanced agentic AI systems demand more CPU processing power than simple chatbots. These systems handle complex operations across multiple steps.
Supply Chain Pressure Intensifies
The growth in agentic AI applications has increased strain on CPU supply. Intel discussed CPU supply constraints during its January earnings call. The company said rapid AI adoption led to higher demand for traditional computing.
AMD reiterated earnings call comments about boosted supply capabilities. The company expressed confidence in meeting customer demand through its supply chain. TSMC partnership remains central to AMD’s production strategy.
