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U.S. chipmaking giants Intel (INTC) and Advanced Micro Devices (AMD) are signing longer-term purchase commitments with Chinese server customers for data-centre processors as prices surge, Reuters reported, citing people familiar with the talks.
AI data centres require not only Nvidia-style (NVDA) graphics processors but also large numbers of central processing units to support servers, storage, networking and inference workloads.
The agreements under discussion typically lock in purchase volumes but not prices, the people said. Most cover about a year of supply, although Intel (INTC) and AMD (AMD) have discussed commitments of two years or longer from some customers, one of the people said.
Server CPU prices are still climbing in China, with month-on-month increases topping 10% for some products, one of the sources said. Prices of some CPU products have risen more than 40% in China since the start of the year, the report added.
As per earlier reports, Intel and AMD had notified Chinese customers of lengthy waits for server CPUs, with Intel lead times reaching as long as six months for some products.
The CPU shortage will be among the key topics likely to be addressed on Thursday when Intel reports its quarterly results.
CEO Lip-Bu Tan told analysts in April that demand "continues to run ahead of supply," especially for Xeon server CPUs. He also cited a multi-year deal with Google as one of several long-term contracts Intel signed in the first quarter.
