Intel and AMD have alerted customers in China to tightening supplies of server CPUs, with Intel cautioning that delivery times could stretch to as long as six months, according to people familiar with the matter. The shortages have pushed Intel’s server CPU prices in China up by more than 10 percent on average, though actual increases depend on individual contracts.

Heavy investment in artificial intelligence infrastructure has intensified demand across the chip supply chain, not only for AI accelerators but also for supporting components. Memory chips have been hit hardest, with prices continuing to surge, and CPU availability has now also become more constrained. These developments could worsen supply challenges for AI firms as well as a wide range of other manufacturers.

China, which contributes over one-fifth of Intel’s total revenue, is seeing particularly acute shortages of Intel’s fourth- and fifth-generation Xeon processors. Intel has been rationing shipments and is facing a large backlog of unfilled orders, with some customers waiting up to six months for delivery. AMD has also notified Chinese clients of supply limitations. Some AMD server CPUs now have lead times of eight to ten weeks, according to sources.

Intel acknowledged during its January earnings call that CPU supply remains tight, citing strong demand driven by rapid AI adoption. The company said inventories are expected to bottom out in the first quarter, with gradual improvement anticipated from the second quarter onward into 2026. AMD, meanwhile, said it has expanded supply capacity and remains confident in meeting global demand, supported by its supplier relationships, including its partnership with TSMC.

Together, Intel and AMD dominate the global server CPU market. Intel’s market share has fallen from more than 90 percent in 2019 to around 60 percent in 2025, while AMD’s share has risen from roughly 5 percent to over 20 percent. In China, major customers include leading server makers and cloud service providers such as Alibaba and Tencent.

The shortages are the result of several factors. Intel has faced ongoing manufacturing yield challenges, while AMD relies on TSMC, which has prioritized AI chip production, limiting capacity for CPUs. Rising memory prices have also prompted customers to accelerate CPU purchases to avoid higher overall system costs. Additionally, growing demand for advanced agentic AI systems, which require substantially greater CPU processing power than traditional workloads, has further strained supply.