AMD notified its Chinese customers on February 6 2026 that supply of its EPYC server CPUs would be constrained, with delivery lead times extending to eight to ten weeks. The notice followed a similar warning from Intel, which cited lead times of up to six months for its own server processors.
The shortage reflects a tightening global chip supply driven by a surge in demand for AI infrastructure. TSMC, AMD’s primary foundry, has been prioritizing high‑margin AI chips, reducing capacity for standard server CPUs, while Intel has faced manufacturing yield issues. These supply‑chain constraints have amplified the pressure on AMD’s data‑center customers, who rely on EPYC chips for cloud and AI workloads.
AMD’s data‑center segment generated $5.4 billion in revenue in Q4 2025, a 39% year‑over‑year increase, and the company projects more than 60% annual growth over the next three to five years. The current supply shortfall threatens the ability to meet that aggressive target, as customers may delay or cancel orders, potentially eroding the segment’s momentum. The shortage also risks constraining AMD’s ability to deliver on its AI accelerator roadmap, including the upcoming MI400 series, which is positioned to compete with NVIDIA’s GPUs in large‑scale AI deployments.
CEO Lisa Su emphasized that while the supply constraints are real, they are not expected to derail the company’s long‑term growth. She noted that “AI chip revenue linked to China will be limited in the near future,” but added that AMD’s data‑center business is at an inflection point and that the company remains confident in its ability to scale. The guidance for Q1 2026 revenue of approximately $9.8 billion, though higher than consensus, was viewed by investors as conservative, contributing to a sharp market sell‑off after the Q4 2025 earnings release.
The market reaction to AMD’s Q4 2025 earnings and Q1 2026 guidance was driven by the perception that the company’s forward‑looking outlook was too cautious given the high expectations for AI‑driven growth. Investors focused on the CEO’s comments about limited near‑term revenue from China and the broader supply‑chain headwinds, which tempered enthusiasm for the company’s aggressive long‑term AI roadmap.
The supply shortage underscores the fragility of the semiconductor supply chain and highlights the competitive pressure AMD faces from Intel and NVIDIA. While the company’s data‑center revenue remains a key growth engine, the current constraints may slow the pace of new customer deployments and delay the full realization of the MI400 series’ potential. AMD’s ability to navigate these headwinds will be critical to maintaining its market share gains and sustaining the high growth trajectory it has set for the next few years.
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