TLDR
- Intel and AMD have warned Chinese customers of server CPU shortages, with Intel delivery times reaching up to six months
- Intel’s server CPU prices in China have increased by more than 10% due to supply constraints
- AMD’s delivery lead times for some products have extended to 8-10 weeks
- China represents over 20% of Intel’s total revenue, with fourth and fifth-generation Xeon CPUs in particularly short supply
- The shortages stem from AI infrastructure demand, manufacturing challenges at Intel, and TSMC prioritizing AI chip production over CPUs
Intel and AMD have notified customers in China about server CPU shortages that could last for months. The two chip makers sent notices to Chinese clients in recent weeks about the supply problems.
Intel warned some customers they may wait up to six months for delivery of certain CPUs. The company has built up a backlog of unfulfilled orders for its products. AMD told clients to expect delivery times of eight to 10 weeks for some of its processors.
The supply issues have pushed up prices in China’s market. Intel’s server products now cost more than 10% higher in China compared to previous pricing. The exact price varies depending on individual customer contracts.
China is a major market for Intel’s business. The country accounts for more than 20% of Intel’s total revenue. Intel’s fourth-generation and fifth-generation Xeon CPUs face the most severe shortages in the region.
The company is rationing deliveries to customers due to limited supply. Two sources familiar with the situation confirmed Intel has a large backlog of orders waiting to be filled.
Growing AI Demand Strains Supply Chain
The chip shortages connect to the rapid growth in artificial intelligence infrastructure. Companies are investing heavily in AI systems and data centers. This investment has created high demand for AI chips and related components.
The rush for AI technology has affected the entire supply chain. Memory chip prices have been rising as demand outpaces supply. CPU shortages add another challenge for companies building AI systems.
Intel pointed to AI adoption as the reason for increased demand. The company said in January that strong interest in “traditional compute” has strained its supply. Intel expects inventory levels to hit their lowest point in the first quarter of 2026.
The company plans to increase supply through the second quarter and rest of 2026. Intel stated it is working to address the shortages aggressively.
Manufacturing and Capacity Issues
Intel has faced problems ramping up production at its factories. The company continues to deal with manufacturing yield challenges. These issues have limited how many CPUs Intel can produce.
AMD relies on Taiwan Semiconductor Manufacturing Company (TSMC) to make its chips. TSMC has focused its production capacity on AI chips. This leaves less room for CPU manufacturing.
AMD said it has expanded its supply capabilities to meet demand. The company expressed confidence it can serve customers globally. AMD cited its strong agreements with suppliers and partnership with TSMC.
The two companies control most of the global server CPU market. Intel’s market share dropped from over 90% in 2019 to about 60% in 2025. AMD’s share grew from around 5% in 2019 to more than 20% last year.
Chinese customers include major server makers and cloud providers like Alibaba and Tencent. Memory chip shortages have also affected the situation. When memory prices started rising late last year, customers bought CPUs early to secure better memory prices.
Advanced AI systems called agentic AI require more CPU power than basic chatbots. These systems perform complex operations across multiple steps. The growth in agentic AI applications has increased demand for processing power.
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