Intel, AMD lock in long-term China server chip deals as AI demand lifts prices
Synopsis
Rising data-centre demand is prompting Intel and AMD to sign longer-term supply deals with Chinese customers as server processor prices surge.
Key Highlights
- Intel and AMD are signing long-term server CPU purchase commitments in China.
- For some products, the price of server CPUs in China has increased by more than 40% since the beginning of the year.
- The trend driven by demand for strong AI is making buyers go with long-term supply agreements.
Intel and Advanced Micro Devices (AMD) are negotiating longer-term purchase commitments with Chinese server customers for data-centre processors as prices continue to increase.
Such agreements generally tie down volumes of purchase but not prices. Most cover about one year's worth of supply, although Intel and AMD have talked two years or longer with some customers.
AI Demand Drives CPU Shortage
The shift indicates increased requirements for server CPUs because AI data centres need many processors to back both servers and storage, networking and inference workloads.
Prices for China server CPUs continue to rise, with some products seeing monthly increases exceeding 10%. Some CPU products have increased 40% since the start of the year.
Earlier this year, Reuters said Intel and AMD had told Chinese customers to expect extended wait times for server CPUs; with Intel products having lead times of up to six months.
China is still an Important Server Market
China is still one of the largest markets for servers in the world, driven by fast-growing data centres, AI computing clusters and national computing infrastructure.
The integration has boosted the demand for both Intel and AMD chips, while customers in China have struggled to access the most advanced AI GPUs as a result of US limits.
Source: Reuters
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