China is facing growing supply constraints for server processors as Intel (INTC.O) and AMD (AMD.O) notify customers of extended delivery lead times, sources familiar with the matter said. The shortages are being driven by surging demand for artificial intelligence (AI) infrastructure, which has created unprecedented stress across the chip supply chain.
Intel warned of delivery lead times for its fourth- and fifth-generation Xeon CPUs of up to six months, while AMD has extended some delivery windows to eight to ten weeks. The rapid AI adoption has pushed memory prices higher, further compounding the challenges, according to industry sources.
Intel AMD CPU Shortages Impact Server Customers
China, which accounts for more than 20% of Intel’s global revenue, has been particularly affected. Major server manufacturers and cloud computing providers, including Alibaba (9988.HK) and Tencent (0700.HK), face rationed deliveries and increased prices — generally more than 10% higher — as supply fails to meet demand.
Intel has cited persistent manufacturing yield challenges as a reason for its supply constraints, while AMD relies on Taiwan’s TSMC, whose production capacity has prioritized AI chips over traditional server CPUs. Memory shortages have also prompted customers to accelerate CPU purchases, locking in lower memory costs ahead of continued price hikes.
The CPU shortage comes amid a spike in demand for agentic AI systems, which perform complex, multi-step operations far beyond simple chatbot tasks, significantly increasing server CPU requirements.
Intel AMD CPU Shortages Could Ease in 2026
Intel said inventory is at its lowest level in the first quarter but expects supply to improve through the second quarter of 2026. AMD reiterated confidence in its ability to meet global demand, pointing to strong supplier agreements and supply chain partnerships, including TSMC.
Despite both companies together dominating the global server CPU market, Intel’s share has fallen from over 90% in 2019 to roughly 60% in 2025, while AMD’s share has climbed from 5% to more than 20%, according to UBS. Analysts say the current shortages highlight the strain that AI growth is placing on traditional computing components.