Intel $INTC and AMD $AMD are entering extended supply agreements with Chinese data-center buyers for server processors amid rising prices, Reuters reported, citing two people with knowledge of the negotiations.
Some CPU products have risen more than 40% in price in China since the start of the year, tightening supply for cloud providers and internet companies
Justin Sullivan / Getty Images
Intel $INTC and AMD $AMD are entering extended supply agreements with Chinese data-center buyers for server processors amid rising prices, Reuters reported, citing two people with knowledge of the negotiations.
Under these deals, buyers commit to specific volumes without locking in pricing. The majority span around twelve months, though discussions with certain customers have touched on commitments extending to two years or beyond, according to one source.
In China, server CPU prices continue to move higher, with certain products posting sequential monthly gains above 10%. One source added that select CPU lines have seen their prices jump over 40% compared with where they stood at the beginning of the year.
The negotiations signal a new dynamic for server CPUs, a category that buyers have traditionally been able to source without the friction associated with AI accelerators or memory chips. Should supply remain constrained, Chinese cloud operators and internet companies building out AI services could face higher procurement costs and delays in rolling out capacity.
Beyond graphics processors, AI data centers depend on substantial quantities of CPUs to keep servers, storage systems, networks, and inference pipelines running. Reuters drew a parallel to the memory-chip sector, where procurement behavior shifted similarly after AI demand outpaced available supply and buyers sought greater supply-chain stability through extended contracts.
In earlier reporting this year, both companies warned Chinese customers of extended delivery windows, with waits for certain Intel server CPUs stretching to roughly half a year.
Speaking to analysts in April, Intel CEO Lip-Bu Tan said demand "continues to run ahead of supply," with Xeon server chips under particular pressure, and pointed to a multi-year Google $GOOGL agreement among a handful of extended contracts Intel concluded during the first quarter. Intel is scheduled to report quarterly results on Thursday. AMD, whose earnings are due in early August, has revised its server CPU market outlook upward to exceed $120 billion by 2030, pointing to the growing role of agentic AI as a driver.
When Intel posted results earlier this year that showed stronger-than-expected CPU demand from AI infrastructure builders, AMD stock climbed about 12% and multiple Wall Street analysts upgraded the company, viewing the CPU tailwinds as favorable for both chipmakers. At the time, Intel revised its own server CPU forecast from marginal unit growth to double-digit growth through 2026.
China ranks among the biggest server markets globally, with demand underpinned by aggressive investment in data-center capacity, AI compute facilities, and government-backed computing projects. This comes even as Chinese companies remain subject to distinct U.S. export controls that limit their ability to procure cutting-edge AI graphics chips.
Intel and AMD did not respond to requests for comment.
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