Intel NASDAQ:INTC and AMD NASDAQ:AMD are reportedly locking in longer-term deals with Chinese data-center customers as server CPU shortages push prices sharply higher.
Most of the agreements under discussion would cover about a year of supply, though some could run for two years or more, according to Reuters. The deals would guarantee purchase volumes, but not prices, meaning customers may still have to pay more if the market tightens further.
That matters because AI data centers need far more than just Nvidia NASDAQ:NVDA GPUs. They also rely on large numbers of CPUs to handle storage, networking, server management and inference workloads.
Prices for some server processors in China have already jumped more than 40% this year, while monthly increases have topped 10% for certain chips. Intel has also warned that lead times for some Xeon processors have stretched to six months.