Exclusive: Intel, AMD Notify Customers in China of Lengthy Waits for CPUs
In a significant development shaking up global semiconductor supply chains, Intel and AMD have notified customers in China of lengthy waits for CPUs, highlighting intensifying supply constraints amid booming demand for server processing power. This unexpected shift reflects critical pressures on chip manufacturing and distribution, triggered largely by the explosive growth of artificial intelligence (AI) workloads and infrastructure investments. The ripple effects of these CPU delays are playing out across China’s technology ecosystem, cloud providers, data centers and manufacturers alike.
Surge in Demand Amid AI Infrastructure Expansion
The core reason driving the CPU backlog is the skyrocketing demand connected to AI systems and data center deployments worldwide. As companies expand their AI capabilities to support compute-intensive workloads, they are placing heavy orders not just for AI-specific chips but also for traditional server CPUs. This convergence has pushed demand beyond anticipated levels and strained existing production capacities.
Analysts note that the rapid uptake of AI-powered applications and agentic AI systems—which require substantial central processing units—has pulled forward demand timelines. Server CPUs, once a stable part of enterprise hardware replenishment, are now central to next-generation compute infrastructures. As a result, manufacturers like Intel and AMD are struggling to match supply with surging orders.
Lengthy Lead Times for Intel and AMD CPUs
According to sources familiar with the situation, Intel has warned some Chinese customers that delivery lead times for its server CPUs could extend up to six months. These delays are most acute for Intel’s fourth- and fifth-generation Xeon processors, which remain in high demand among major cloud computing and enterprise firms.
Meanwhile, AMD has also communicated supply constraints to its Chinese clients, with delivery waits for certain products extending to eight to ten weeks. While AMD’s backlog is comparatively shorter than Intel’s, the company is nonetheless feeling the pressure from supply chain bottlenecks and demand surges.
Impact on China’s Tech and Cloud Sector
China represents a crucial market for both Intel and AMD, accounting for more than 20 % of Intel’s overall revenue. Major Chinese technology companies—including cloud giants and server manufacturers—rely heavily on steady CPU supplies to drive their own AI and cloud services. With extended lead times, projects could face delays or cost escalations, especially as hardware procurement cycles adjust to longer wait periods.
This situation is coinciding with broader memory chip shortages and rising memory prices, which have pushed customers to accelerate CPU purchases in an effort to lock in pricing before further cost hikes. The interplay of CPU delays and memory cost pressure has compounded the challenges faced by large tech customers.
Factors Behind the Supply Crunch
There are several intertwined reasons behind this widening CPU supply gap:
1. AI-Driven Demand Explosion:
The AI boom has led firms to invest more aggressively in high-performance computing, requiring both specialized AI processors and conventional server CPUs to support hybrid workloads.
2. Production Challenges at Intel:
Intel has faced persistent manufacturing yield challenges that have limited its ability to rapidly ramp up production of the latest Xeon CPUs. These challenges can slow down output and lead to extended delivery windows.
3. Foundry Prioritization at TSMC for AMD:
AMD outsources production of its chips to Taiwan Semiconductor Manufacturing Company (TSMC). As TSMC prioritizes capacity for high-end AI chips, CPU production slots have become relatively constrained, limiting AMD’s ability to scale supply swiftly.
4. Memory Supply Disruptions:
Shortages in memory chips—a key complementary component in servers—have further complicated the supply chain, prompting earlier CPU purchases and pushing inventory planning into unpredictable territory.
Price Pressures and Market Reactions
The supply constraints have also had pricing implications. In China, prices for Intel’s server products have risen by more than 10 %, although specific increases vary depending on individual contracts. This pricing shift underscores the broader impacts of scarcity, as customers are forced to absorb higher costs or renegotiate terms to secure necessary hardware.
Investors and market observers are closely watching how these supply disruptions affect the competitive balance between Intel and AMD. While Intel continues to lead in terms of overall market share for server CPUs, its advantage has narrowed in recent years—from over 90 % in 2019 to about 60 % by 2025—while AMD has grown to over 20 % of the market.
Broader Implications for Global Supply Chains
The news of Intel and AMD notifying customers in China of lengthy waits for CPUs highlights broader vulnerabilities in semiconductor supply chains. These constraints are not limited to any one region and reflect global tensions in chip production, distribution, and inventory management. As demand continues to evolve, supply chains will need to adapt more dynamically to meet unexpected surges.
For multinational enterprises and cloud service providers, extended CPU lead times may necessitate strategic shifts in procurement, inventory planning, and forecasting. Companies with diversified supply bases or closer relationships with foundries might fare better, while others could face delays that ripple into service delivery and competitiveness.
Strategies for Navigating CPU Supply Delays
Customers and partners affected by CPU delays are exploring several strategic responses, such as:
- Diversifying Supplier Portfolios: Working with alternative suppliers and exploring partnerships with local manufacturers to reduce reliance on any single production source.
- Inventory Hedge Planning: Anticipating longer wait times by increasing safety stock levels where feasible, even at higher carrying costs.
- Hardware Lifecycle Optimization: Extending the usable life of existing server hardware through optimization and virtualization to reduce immediate replacement needs.
- Collaborative Forecasting: Engaging with vendors proactively to share demand forecasts, which can improve prioritization and allocation under constrained conditions.
As the global technology landscape continues to evolve under AI-driven demand, supply chain resilience and flexibility are becoming essential strategic priorities for enterprises of all sizes.
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