CPU Supply-Demand Gap Continues to Widen, Price Hikes Expected to Continue in Q3

The continuous explosion of AI computing power demand is driving the CPU market to usher in a new round of price hikes, and the tight supply-demand pattern is difficult to ease in the short term. The market expects the price hike trend to continue in the third quarter.

According to relevant industry reports, as of April 22, insiders from the ODM (Original Design Manufacturer) industry revealed that since March this year, the price of consumer-grade CPUs has risen by 5% to 10%, and the increase in server CPUs is even more significant, reaching 10% to 20%. Insiders in the supply chain further stated that leading international chip manufacturers are planning to launch a new round of price hikes in the third quarter, which will further push up the price level of the CPU market.

There are two core logics driving this round of CPU price hikes: first, the demand for AI servers is heating up rapidly, and the market's purchasing intensity for core computing components has increased significantly, directly driving the surge in CPU demand; second, the production capacity of advanced manufacturing processes is highly concentrated, and the supply side is difficult to respond to the rapid growth in demand in a timely manner, leading to a continuous intensification of the supply-demand imbalance pattern.

Intel and AMD Take Successive Actions, Price Hikes Become Industry Consensus

In this round of price hikes, Intel took the lead. Relevant sources show that Intel first raised the price of PC CPUs in March this year, and further increased the price of server CPUs on April 1. This move directly drove the recovery of its gross profit margin in the second quarter. The market generally expects that there is still room for an 8% to 10% increase in Intel's server CPU prices in the second half of the year.

Regarding AMD, market sources indicate that its server CPU product line is expected to raise prices once in the second quarter and once in the third quarter, with a cumulative increase of 16% to 17% in the two rounds, further following the industry price hike trend.

As the two major giants in the global CPU industry, Intel and AMD have successively launched price hikes, which means that CPU price hikes are not the market behavior of individual manufacturers, but a common phenomenon caused by supply-demand imbalance at the industry level, and the price hike trend has formed an industry consensus.

Production Capacity Bottleneck is the Core Contradiction

Industry analysis points out that the root cause of this round of CPU price hikes lies in insufficient production capacity supply, rather than abnormal fluctuations in market demand itself. The production capacity bottleneck has become the core contradiction restricting the balance between supply and demand in the CPU market.

With the gradual mass production and capacity expansion of 2nm and 3nm advanced manufacturing processes, four core chips — AI chips, GPUs, TPUs, and CPUs — are competing for limited production capacity resources on the same wafer foundry production line. Insiders in the supply chain stated frankly: "At present, CPUs are still in a state of severe supply shortage, and there is no end in sight to the price increase trend."

TSMC's production capacity allocation trend is regarded as an important weather vane for the supply-demand pattern of the CPU market. Insiders in the wafer foundry industry said that TSMC's continuous increase in 3nm production capacity is mainly due to the simultaneous explosion of demand for CPUs and AI ASICs. At present, the mainstream generation CPUs of Intel and AMD, as well as Nvidia's upcoming Vera CPU, all adopt the 3nm process — this means that the competition for production capacity among various chips at the same advanced process node is extremely fierce, further squeezing the production capacity space of CPUs.

Intel Spends $14.2 Billion to Regain Control of Production Capacity

Against the background of limited external wafer foundry production capacity and intensified competition, Intel chose to gain control of production capacity by building its own production capacity and repurchasing equity to ease supply-demand pressure.

Relevant reports show that Intel recently announced that it will repurchase 49% of the equity of the Fab 34 wafer factory in Ireland at a price of $14.2 billion, officially regaining control of the production capacity of the wafer factory. It is reported that Fab 34 is a key production base for Intel 4 and Intel 3 processes, and one of the advanced process wafer factories with the highest output of Intel currently. Its return of production capacity will effectively improve Intel's own CPU production capacity supply capacity.

The market generally interprets this move as: Intel is laying out production capacity in advance for the continuous explosion of CPU demand in the AI inference era. By strengthening its own production capacity, it will reduce its dependence on external wafer foundries, thereby taking the initiative in the long-term production capacity competition.

Supply-Demand Gap May Persist Until 2027

Institutional analysts said that during 2026 to 2027, the CPU market will continue to maintain a state of high shortage, and the key restricting factor leading to this pattern is still production capacity supply, not market demand.

The industry pointed out that as long as the global AI infrastructure continues to expand and the bottlenecks in advanced manufacturing processes and chip packaging links are not effectively alleviated, the CPU price hike trend will continue, and will drive the entire CPU supply chain, including wafer foundry, packaging and testing, and equipment materials, to benefit comprehensively.

For the market, the duration and magnitude of this round of CPU price hike cycle will largely depend on the production capacity expansion rhythm of leading wafer foundries such as TSMC, as well as the actual landing speed of global AI computing power investment. Both will jointly determine the mitigation progress of the CPU supply-demand pattern.

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