Supply chain pressures intensify as server CPU demand surges
Intel and AMD have informed customers in China that deliveries of key server central processing units (CPUs) are facing significant delays, industry sources told Reuters. The prolonged wait times come amid rising demand tied to artificial intelligence (AI) infrastructure development, adding pressure to global China server CPU demand and broader semiconductor supply chains.
According to a Reuters report, Intel and AMD have informed customers in China about extended wait times for server CPUs due to rising demand and supply constraints.
Major Delays in Server CPU Deliveries
Intel has warned Chinese customers that delivery lead times for some of its fourth- and fifth-generation Xeon server CPUs could stretch as long as six months, according to people familiar with the issue. At the same time, the company’s server products in China are now generally priced more than 10% higher, although actual pricing differences vary by contract.
AMD, the other leading server chip maker, has also notified clients that deliveries of its products are being pushed out, with lead times reported between 8 to 10 weeks.
Why the CPU Shortages Are Growing
Industry insiders point to a mix of AI infrastructure chip shortages and production bottlenecks as the main drivers of these delays:
- Surging demand for artificial intelligence systems is putting extra strain on traditional compute components such as server CPUs and memory.
- Memory chip price rises have further complicated supply, prompting some buyers to accelerate CPU purchases while they can.
- Intel has struggled with production yields, limiting how quickly it can fulfill backlogged orders.
- AMD relies on Taiwan’s TSMC for chip fabrication. With TSMC focusing much of its capacity on cutting-edge AI chips, less wafer space remains for standard server CPUs.
These factors together are creating a semiconductor supply chain bottleneck that is hitting server hardware makers, cloud providers, and other manufacturers dependent on reliable CPU supply.
The broader memory and chip market in China — including developments like the CXMT IPO and its impact on China DRAM & AI growth — illustrates how hardware demand is reshaping the semiconductor landscape.
Market Impact & Company Responses
China represents more than 20% of Intel’s overall revenue, making these delivery challenges especially significant for its business strategy in the region. Major Chinese tech companies like Alibaba and Tencent are among those affected by the extended wait times.
Intel said in a recent statement that it is working to balance inventory levels as China server CPU demand continues to rise alongside AI infrastructure expansion.
Intel acknowledged the strong demand for “traditional compute” components as AI adoption accelerates and said it expects inventory levels to be at their lowest in the first quarter of 2026. However, the company said it is taking measures aimed at easing supply by the second quarter of the year.
AMD reaffirmed its confidence in meeting global demand based on its existing supply agreements and manufacturing partnerships, particularly with TSMC.
Competitive Landscape & Long-Term Trends
Together, Intel and AMD dominate the global server CPU market, but their market shares are evolving. Intel’s share has declined over recent years while AMD’s has grown, reflecting shifts in buyer preferences and competitive progress.
For buyers in China and elsewhere, the combination of strong AI-related computing demand and constrained production capacity means that lead times may remain stretched until supply catches up. Analysts say this trend could influence future investment decisions in cloud infrastructure and enterprise hardware planning.
Summary:
Intel and AMD have warned Chinese customers about prolonged delivery lead times for server CPUs, driven by booming AI infrastructure demand and production constraints. With prices rising and delivery windows stretched, companies reliant on China server CPU supply are navigating extended waits and shifting market dynamics.