Intel and AMD Sign Long-Term CPU Supply Deals With Chinese Server Buyers

TLDR

• Intel and AMD are signing multi-year CPU supply deals with Chinese server customers
• Agreements lock in purchase volumes but not prices
• Some CPU prices in China have risen more than 40% this year
• Month-on-month price increases are topping 10% for some products
• The CPU shortage is expected to be a key topic when Intel reports quarterly results Thursday

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Intel and AMD are in talks with Chinese server buyers to lock in longer-term supply deals for data center processors. The move comes as prices for those chips keep climbing in China’s fast-growing server market.

Intel Corp., INTC

The deals being discussed typically cover about one year of supply, though some commitments stretch to two years or more. They lock in purchase volumes, but not prices, according to two people familiar with the talks who asked not to be named.

Why CPU Prices Are Rising

The AI boom has pushed demand beyond graphics processors. Data centers also need large numbers of central processing units to handle storage, networking, and inference workloads. That demand is now straining CPU supply too.

Some CPU prices in China have risen more than 40% since the start of 2026. Month-on-month increases have topped 10% for certain products. Earlier this year, Intel notified Chinese customers of lead times as long as six months for some chips.

The pattern mirrors what happened in the memory chip market, where AI-driven shortages pushed buyers toward longer supply commitments.

China is one of the world’s largest server markets. The country is rapidly building data center racks, AI computing clusters, and national computing infrastructure. That buildout has increased competition for Intel and AMD processors, even as Chinese buyers face U.S. restrictions on access to advanced AI GPUs.

What the Companies Are Saying

Intel CEO Lip-Bu Tan told analysts in April that demand “continues to run ahead of supply,” especially for Xeon server CPUs. He also pointed to a multi-year deal with Google signed in the first quarter as one example of the longer-term contract trend.

Intel is set to report quarterly results Thursday. The CPU shortage is expected to come up.

AMD raised its server CPU market forecast to more than $120 billion by 2030. The company cited strong demand tied to agentic AI workloads. AMD is due to report its own quarterly results in early August.

Impact on Chinese Cloud Providers

Tighter supply could raise costs for Chinese cloud companies and internet firms expanding AI services. If CPU supply continues to tighten, it could slow the pace at which those companies can deploy new AI infrastructure.

Neither Intel nor AMD responded to requests for comment on the supply talks.

The longer-term deals give chipmakers more predictable demand visibility. For buyers, they help secure access to chips that were, until recently, easier to get than AI accelerators.

Intel and AMD have not confirmed the specifics of any individual agreements with Chinese customers.