AMD and Intel are reportedly exploring a price increase of up to 15% for server CPUs, as both companies have sold out their existing inventories for the rest of the year.
Hyperscalers Are Looking to Shift Towards Newer Server CPU Generations, Opening Up an Opportunity For AMD/Intel
The AI frenzy has now managed to gobble up server CPUs, and according to an estimate by KeyBanc (via Jukan), both AMD and Intel have reportedly sold out their respective server CPU inventories for this year. It is claimed that most of the demand is coming from hyperscalers, who are looking to integrate the newest server CPUs into their existing rack architectures, which is why demand has seen a significant rise over the past few quarters. With that, it is claimed that both AMD/Intel are looking to raise server CPU prices by up to 15%, to ensure that supply remains steady.
One of the bigger prospects for server CPU manufacturers comes from the fact that hyperscalers have entered an 'upgrade cycle', which means that they are looking to replace older CPU architectures, transitioning towards newer offerings like AMD's 5th-gen EPYC 'Turin' CPUs and Intel's Xeon Granite Rapids. More specifically, server CPU shipments are expected to grow by up to 25% this year alone, indicating that there's immense potential for the likes of AMD/Intel to expand their DC segment through server CPU offerings.
We know that within this year alone, AMD has managed to dominate the server market, driven by strong interest in EPYC offerings. However, based on KeyBanc's estimate, it appears that the prospect for server CPU revenue is excellent for all players in the market. More importantly, both AMD and Intel are looking to go 'aggressive' with next-gen server CPU offerings, and in particular, AMD plans to introduce its EPYC Venice '2nm' CPUs in H2 2026, which is known to be a disruptive offering.
For Intel and AMD, the DC segment presents an opportunity to capitalize on the hyperscaler buildout, and for Team Blue in particular, given that its AI accelerator business is lagging, Intel may have a chance to expand its exposure to hyperscalers through its server CPU business.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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