Chipmaker leaders Intel and AMD are reportedly signing longer-term purchase commitments with Chinese server customers for data centre processors.
As cited by people familiar with the matter to Reuters, the move comes as prices continue to surge as a consequence of the AI boom. Demand has spread beyond AI accelerators to memory, networking gear and server processors, giving suppliers more leverage to seek long-term purchase deals.
The agreements reportedly under discussion typically lock in purchase volumes but not prices, the people said, adding that Intel and AMD have discussed commitments of two years or longer from some customers.
AI-driven shortages in the memory-chip market have led to purchasers to consider longer-term supply commitments. It marks a shift for server CPUs, which have been easier to obtain than AI accelerators or memory chips, Reuters explained. Tighter supply could raise costs and slow deployment for cloud providers in China.
CPU prices are still increasing in China, the sources said, with some products having risen more than 40% since the start of the year. Given shortages, lead times at Intel are as long as six months. Earlier in the year, AMD informed its clients of supply chain constraints, with some delivery lead times being eight to ten weeks.
The news came shortly after Intel flagged supply constraints, suggesting that rapid AI adoption had led to unprecedented demand for traditional compute.
“In the short term, I’m disappointed that we are not able to fully meet the demand in our markets,” Intel chief executive Lip-Bu Tan told analysts at the time, adding that the company was “working aggressively to grow supply to meet strong customer demand”.
AMD has committed to raising its server CPU market forecast to more than $120 billion by 2030, amid strong demand related to agentic AI workloads, according to Reuters.
The news comes shortly after AMD announced a multi-year engineering collaboration with Anthropic to use Claude and optimise workloads for AMD Instinct GPUs and accelerate ROCm software development.
As part of a $5 billion investment, AMD will broadly adopt Claude across its engineering and product development teams.
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