CPU shortage upgraded again! Intel Corporation(INTC.US) and AMD(AMD.US) urgently notify Chinese customers of supply shortage, with the longest delivery period reaching 6 months.

According to informed sources, Intel Corporation (INTC.US) and AMD (AMD.US) have informed Chinese customers of a shortage of server central processing units (CPUs), with Intel Corporation warning that delivery of related products could take up to 6 months. One of the above-mentioned sources stated that due to the supply shortage, the overall prices of Intel Corporation's server products in the Chinese market have increased by more than 10%, with specific increases varying depending on the customer's cooperation contract. The investment frenzy in the field of artificial intelligence (AI) infrastructure has not only sparked a rush for dedicated AI chips, but has also exacerbated supply and demand conflicts in other parts of the supply chain, with storage chip shortages being particularly prominent and prices continuing to soar. The sources stated that the two companies recently issued the above-mentioned supply notifications to Chinese customers, further escalating the shortage of CPU supply, which may further increase the production and operational pressure on domestic AI companies and many manufacturing companies. Severe Backlog of Orders The two sources stated that the Chinese market accounts for over 20% of Intel Corporation's global revenue, and the current supply shortage is particularly evident for the company's fourth and fifth generation Xeon server CPUs, for which Intel Corporation has implemented limited supply. They added that there is a severe backlog of undelivered orders for the above-mentioned model CPUs from Intel Corporation, with delivery times now extended to 6 months. One source and another third-party source both disclosed that AMD has also informed its cooperating customers of supply restrictions, with delivery times for some AMD server CPU products now extended to 8 to 10 weeks. In its earnings call in January, Intel Corporation already mentioned the CPU supply shortage issue, stating in a release that the rapid proliferation of AI technology has raised market demand for traditional computing chips. The release also indicated that Intel Corporation expects chip inventory to be at historically low levels in the first quarter of 2026, but the company is taking proactive measures to alleviate supply pressure, with product supply expected to gradually improve starting from the second quarter. AMD reiterated in its release what was stated in its earnings call, mentioning that the company has increased production capacity to meet strong market demand. The company stated: "With strong supplier partnership agreements and supply chain systems, as well as deep collaboration with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), we are confident in meeting customer demand globally." Global Market Dominance by the Two Giants Intel Corporation and AMD together dominate the global server CPU market. A report released by UBS Group AG in January showed that Intel Corporation's global market share has decreased from over 90% in 2019 to around 60% in 2025, while AMD's market share has increased from around 5% in 2019 to over 20% in 2025. In the Chinese market, key customers for both companies include cloud computing service providers Alibaba Group Holding Limited Sponsored ADR (BABA.US), and Tencent (00700). The current shortage of server CPUs is the result of multiple factors working together. For Intel Corporation, the continuous low chip manufacturing yield has made it difficult for the company to ramp up production capacity quickly. AMD, on the other hand, outsources all chip production to the world's largest wafer foundry, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, which is currently prioritizing production of AI chips, leaving limited capacity for general-purpose CPUs. Moreover, the shortage of storage chips, another core component of servers, has further exacerbated the supply conflict of CPUs. A distributor who deals with both server CPUs and storage chips revealed that since the end of last year, storage chip prices in the Chinese market have been on the rise, with many customers increasing their CPU purchases in order to lock in low-cost storage chip purchases in advance, further driving up market demand. At the same time, the surge in demand for AI systems has put additional pressure on the CPU supply chain. These AI systems can perform complex multi-step operations far beyond traditional chat robots, and the CPU power required for their operation far exceeds that of traditional workloads.