CPU supply is severely outpaced by demand, and prices are expected to continue rising in Q3.

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The demand for AI computing power continues to surge, and the CPU market is seeing a new round of price increases.

According to Taiwan's Economic Daily News on April 22, ODM (Original Design Manufacturer) industry insiders stated that since March of this year, consumer-grade CPU prices have risen by 5% to 10%, and server CPU prices by 10% to 20%. Supply chain sources revealed that international giants are preparing to launch a new round of price hikes in the third quarter.

There are two core reasons driving this round of price increases: First, demand for AI servers is rapidly increasing, driving strong procurement of core computing components; Second, advanced manufacturing capacity is highly concentrated, making it hard for supply to respond promptly to rising demand.

Intel and AMD take action one after another—price hikes have become industry consensus

Intel acted earliest. According to reports, Intel raised PC CPU prices in March this year, and further increased server CPU prices on April 1, boosting gross margins in the second quarter. The market expects there to be another upward adjustment of about 8% to 10% in the second half of the year.

As for AMD, market sources said its server CPU product line is expected to see price increase once in the second quarter and again in the third quarter, with a cumulative increase of 16% to 17% across the two hikes.

Both CPU giants’ actions indicate that the price increase is no longer an isolated phenomenon, but rather the result of supply-demand imbalance across the industry.

Capacity bottleneck is the core contradiction

The root cause of the CPU price increase lies in production capacity, not abnormal demand fluctuations.

As 2nm and 3nm processes enter mass production and expansion phase, AI chips, GPUs, TPUs, and CPUs are all competing for limited wafer foundry capacity on the same production lines. Supply chain insiders bluntly state: "Currently, CPUs are still in a serious state of supply shortage, and the end of price increases is not yet in sight."

TSMC’s capacity allocation moves are seen as an important indicator. According to industry sources in wafer foundry, TSMC continues to increase its 3nm capacity, mainly due to simultaneous surges in demand for CPUs and AI ASICs. At present, mainstream generation CPUs from Intel and AMD, as well as Nvidia’s upcoming Vera CPU, are all using the 3nm process—meaning competition at this node is extremely fierce.

Intel spends $14.2 billion to regain capacity control

Against the backdrop of limited external production capacity, Intel has chosen to build its own capacity.

According to reports, Intel recently announced the repurchase of a 49% stake in its Irish Fab 34 wafer plant for $14.2 billion, regaining its control of the plant’s capacity. Fab 34 is a key production base for Intel 4 and Intel 3 processes, and is currently one of the highest output advanced process wafer plants.

The market interprets this move as Intel preparing ahead for sustained surges in CPU demand in the AI inference era, in order to reduce reliance on external foundry services.

Supply-demand gap may continue until 2027

Institutional analysts believe that during 2026 and 2027, the CPU market will remain in a highly tight supply situation, with the key constraint being production capacity rather than demand.

Reports indicate that as long as AI infrastructure continues to expand and bottlenecks in advanced processes and packaging are not effectively alleviated, the trend of CPU price increases will persist, benefiting the entire supply chain of wafer foundry, packaging/testing, and equipment/materials.

For the market, the duration and magnitude of this round of price increases will largely depend on the pace of production capacity expansion at wafer foundries like TSMC and the actual implementation speed of AI computing power investments.

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