Global investment in artificial intelligence infrastructure is creating unexpected pressure across the semiconductor supply chain. As a result, Intel and AMD have warned Chinese customers about prolonged server CPU delivery delays.
Intel Faces Extended Backlogs in China
Intel has informed several customers in China about significant shortages of server central processing units. In some cases, delivery timelines now stretch up to six months.
Fourth- and fifth-generation Xeon processors remain the most affected. Consequently, Intel has begun rationing supplies to manage mounting backlogs.
China represents more than twenty percent of Intel’s total revenue. Therefore, prolonged shortages could disrupt enterprise planning across key industries.
Meanwhile, limited availability has pushed server CPU prices higher. In many cases, prices have increased by more than ten percent.
AMD Also Reports Supply Constraints
AMD has also notified customers about restricted server CPU availability. Delivery timelines for some models now extend between eight and ten weeks.
Although AMD has expanded supply capabilities, demand continues to rise rapidly. As a result, pressure on production remains intense.
Together, Intel and AMD dominate the global server CPU market. However, competitive dynamics have shifted significantly over recent years.
Intel’s market share has declined steadily since 2019. Meanwhile, AMD has expanded its presence through aggressive product adoption.
AI Infrastructure Fuels CPU Demand
The explosive growth of AI infrastructure is driving unprecedented demand for computing resources. While attention often centers on AI accelerators, CPUs remain essential.
Advanced AI platforms require strong central processing for coordination and data handling. Therefore, CPU demand has surged alongside AI investment.
Additionally, agentic AI systems need greater processing power. These systems perform complex, multi-step operations beyond traditional workloads.
Manufacturing and Memory Constraints Add Pressure
Production challenges have worsened supply conditions. Intel continues to face yield issues while scaling manufacturing capacity.
AMD relies on external manufacturing partners. However, foundry capacity has prioritized AI chip production over server CPUs.
At the same time, memory shortages have added strain. Rising memory prices encouraged customers to accelerate CPU purchases. As buying accelerated, inventories tightened further.
Outlook Remains Challenging
Chipmakers expect inventories to remain limited in the near term. However, gradual improvement is anticipated later in the year.
Until supply stabilizes, customers must plan cautiously. AI developers and cloud providers face higher costs and longer timelines.
Ultimately, sustained AI investment continues reshaping global server hardware markets.
