Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) have alerted Chinese enterprise customers to critical supply shortages for server central processing units (CPUs), as the explosive growth of "agentic AI" infrastructure diverts global manufacturing capacity.
The supply crunch has sent shockwaves through the world’s second-largest economy, with Intel’s server processor prices in China jumping more than 10% in recent weeks.
According to industry sources, Intel has begun rationing deliveries of its flagship fourth- and fifth-generation Xeon processors, with order backlogs now stretching to half a year.
AMD is facing similar bottlenecks; delivery lead times for its high-core-count EPYC chips have been pushed out to 10 weeks, as its primary foundry partner, TSMC, prioritizes high-margin AI accelerators like Nvidia’s Blackwell and AMD’s own Instinct GPUs.
The shortage is being exacerbated by a "perfect storm" of manufacturing and behavioral factors.
Intel continues to struggle with production yields on its newest nodes, while a simultaneous global spike in memory chip prices has triggered a wave of "panic buying."
Chinese cloud giants like Alibaba and Tencent are reportedly accelerating CPU orders to lock in configurations before further price hikes in DDR5 memory and SSDs make server builds prohibitively expensive.
This trend is particularly acute in China, a region that accounts for over 20% of Intel's total revenue and is currently the primary battleground for domestic tech self-reliance.