Intel and AMD sign long-term server CPU deals with Chinese customers as prices jump over 40%, report claims — agreements purportedly guarantee purchase volumes for about a year without fixing prices

Intel and AMD are signing longer-term purchase commitments with Chinese server customers for data center processors, according to a new Reuters report that cites two people familiar with the talks. Prices for some server CPU products in China have climbed more than 40% since the start of the year and are still rising by over 10% month-on-month in some cases, one of the people said. Most of the agreements guarantee purchase volumes for about a year without fixing prices, and neither company responded to the publication’s requests for comment.

Some customers have discussed commitments running two years or longer, one of the people told Reuters, with the deals covering unit volumes only, which leaves Chinese cloud providers and internet companies fully exposed to a market that has already added 40% to some CPU prices in under seven months. Memory makers struck similar long-term agreements with hyperscalers over the past year as AI demand consumed DRAM and NAND output, but those contracts typically trade a volume commitment for some pricing visibility. Buyers here get neither price protection nor, based on current lead times, fast delivery, but they do get a place in the queue.

Intel said in March that it was pursuing long-term agreements with potential customers as server CPU demand spiked, with CEO Lip-Bu Tan telling analysts on the company’s April earnings call that demand “continues to run ahead of supply,” singling out Xeon server parts. Tan also cited a multi-year supply deal with Google among several long-term contracts signed in the first quarter, so the model now spans U.S. hyperscalers and Chinese channel buyers alike.

Reuters first reported in February that Intel had warned Chinese customers of lead times stretching to six months on some server CPUs, with AMD quoting eight to 10 weeks. By late March, server makers told Nikkei Asia that average CPU lead times had blown out from one to two weeks to eight to 12 weeks and beyond. Intel CFO David Zinsner put a value on that in April, telling investors that unmet Xeon demand “starts with a B,” and the company later confirmed price hikes on select consumer and server CPUs.

Agentic AI workloads are driving much of the demand, as inference and orchestration tasks pull server CPU-to-GPU ratios back toward parity. AMD, which is due to report earnings in early August, has raised its server CPU market forecast to more than $120 billion by 2030, based on the same trend.

Intel will report its second-quarter results later today, where the shortage and the durability of these commitments are likely to come up. Chinese buyers remain cut off from the most advanced AI accelerators under U.S. export controls, but Xeon and EPYC server CPUs carry no such restrictions, making them one of the few U.S.-made AI infrastructure components China can still purchase freely, if it can get them.