Intel and Advanced Micro Devices are negotiating long-term purchasing commitments with Chinese server customers as AI data center demand tightens server CPU supply, according to Reuters, which cited people familiar with the matter. The report said such agreements usually lock in one year of supply, while some discussions have already extended to two years or longer.
Demand has spread beyond AI accelerators to mainstream processors as data center buildouts continue. Reuters said prices for some server CPU products in China have risen more than 40% so far this year, with the biggest month-on-month increase topping 10%.
Intel CEO Lip-Bu Tan said in April that demand for Xeon server CPUs continued to outstrip supply, and that the company signed multiple long-term contracts in the first quarter, including a multi-year deal with Google. AMD, for its part, has raised its forecast for the server CPU market to more than $120 billion by 2030. Reuters added that Intel is due to report quarterly results on Thursday, with CPU shortages expected to be a key focus for the market.
Intel and Advanced Micro Devices are in talks with Chinese server customers over long-term purchasing commitments as a surge in AI data center demand tightens server CPU supply, according to Reuters, which cited people familiar with the matter.
Reuters said these agreements typically lock in one year of supply, while some negotiations have already covered terms of two years or longer. Demand tied to AI infrastructure has also broadened from AI accelerators to mainstream processors.
China market sees sharp server CPU price increases
The report said prices for some server CPU products in China have climbed more than 40% so far this year, with the largest month-on-month increase exceeding 10%.
Reuters described China as one of the world’s largest server markets. Rapid construction of data centers and AI computing clusters is intensifying competition for Intel and AMD processors, even as Chinese buyers also face U.S. export restrictions on advanced AI GPUs.
Intel and AMD both point to stronger server demand
Intel CEO Lip-Bu Tan said in April that demand for Xeon server CPUs had continued to exceed supply. He also said the company signed multiple long-term contracts in the first quarter, including a multi-year agreement with Google.
AMD has raised its forecast for the server CPU market to more than $120 billion by 2030. Reuters also noted that Intel is scheduled to release quarterly results on Thursday, with CPU shortages expected to be a major point of market attention.
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