Exclusive-Intel informs customers in China of long wait for AMD CPUs

BEIJING, Feb 6 (Reuters) – Intel ( INTC ) and AMD ( AMD ) have notified Chinese customers of a supply shortage of server central processing units (CPUs), with Intel warning of delivery lead times of up to six months, people with knowledge of the delay said.

Supply disruptions have typically driven up the price of Intel’s server products in China by more than 10%, although pricing varies by customer contract, according to one of the people.

Increased investment in artificial intelligence infrastructure has created a frenzy not only for AI-specific chips, but also in other parts of the supply chain—most sharply in memory chips, whose prices continue to rise.

These latest notifications to Chinese customers, which sources said were made in recent weeks, indicate that CPU shortages have also intensified. This could add challenges for AI companies as well as many other manufacturers.

Backlogs of incomplete orders

In China, which accounts for more than 20% of Intel’s total revenue, its fourth- and fifth-generation Xeon CPUs are in particularly short supply, with Intel rationing deliveries, two of the people said.

Intel has a substantial backlog of unfilled orders for these models, extending delivery times to six months, they added.

AMD has also notified customers of supply disruptions, one of the people and a third source said. Delivery lead times for some AMD products have been pushed to eight to 10 weeks, a third source said.

The extent of supply disruptions in China is being reported for the first time by Reuters.

Intel, which flagged CPU supply bottlenecks in its earnings call in January, told Reuters in a statement that the rapid adoption of AI has fueled strong demand for “traditional compute.”

The company “expects inventory to be at its lowest level in Q1, but we are aggressively addressing and expect supply to improve in Q2 through 2026,” the statement said.

AMD reiterated comments in its earnings call that it has increased its supply capabilities to cope with strong demand.

“We are confident in our ability to meet customer demand globally based on our strong supplier agreements and supply chain, including our partnership with TSMC,” it said in a statement to Reuters.

Major market share for CPUS

The two companies together dominate the global server CPU market. Intel sees its market share falling from 90% in 2019 to around 60% in 2025, while AMD’s share has grown from around 5% in 2019 to more than 20% last year, according to a UBS report in January.