Here's an interesting side effect of the AI boom nobody really saw coming: if you're trying to buy regular server CPUs in China right now, good luck. Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD) are both warning customers about significant supply constraints, with delivery times that would make waiting for your DMV appointment feel speedy by comparison.
Intel has told Chinese customers that lead times could stretch up to six months. That's not a typo. Six months. And the shortages have already pushed prices for Intel's server products in China up more than 10% in many cases, according to sources familiar with the matter.
When the AI Tide Lifts All Boats (and Sinks Some Supply Chains)
The culprit here is the massive wave of investment flooding into AI infrastructure. Everyone's been watching the scramble for cutting-edge AI accelerators, but that demand is creating ripple effects across the entire computing ecosystem. Companies building out AI capabilities need the whole package: not just fancy AI chips, but also traditional CPUs, memory, and all the other unglamorous components that make data centers actually work.
China represents a particularly painful pressure point. The country accounts for more than 20% of Intel's revenue, and right now, fourth and fifth-generation Xeon processors have become especially scarce there. Intel has resorted to rationing shipments, leaving a growing backlog of unfilled orders piling up.
AMD isn't skating by unscathed either. The company has also alerted customers to supply constraints, with some delivery lead times extending to eight to ten weeks, according to sources.
On the optimistic side, Intel expects supply conditions to start improving in the second quarter of 2026. AMD, meanwhile, said it has expanded its supply capabilities through deals with Taiwan Semiconductor Manufacturing Co. (TSM).
Wall Street Takes Notice
The supply crunch comes as analysts are getting increasingly bullish on AI-driven server demand. KeyBanc analyst John Vinh recently raised his outlook on both AMD and Intel, pointing to strong AI server momentum as a major positive factor.
Vinh noted that December cloud data showed a slight pullback in traditional server instances as providers retired older systems, but overall compute demand still grew year-over-year. He said near-term cloud momentum favored Intel, highlighting a surge in Granite Rapids deployments on Amazon.com Inc. (AMZN) Amazon Web Services, while other new Intel server chips also posted steady gains.
For AMD, the analyst viewed the situation as more neutral. The company held flat month-over-month but still showed solid growth from Turin and Genoa rollouts across major cloud providers.
Investors seem to be buying the story. AMD stock has gained 74% over the last 12 months, while Intel has surged an impressive 148% during the same period.
Price Action: Advanced Micro Devices shares were up 3.74% at $199.70 during premarket trading on Friday. Intel shares were up 2.32% at $49.36.
