The shortage of server chips is getting worse, Intel and AMD cannot provide enough CPU

In the past half a year, we have heard the news of various supply shortages in the semiconductor industry from time to time. The supply of CPUs to GPUs to game consoles has been in short supply, which has become commonplace for consumers. According to Digitimes, the supply of chips for servers and data centers is deteriorating, and the delivery time for some key server chips has been extended to 52 to 70 weeks.

Servers use more components than ordinary consumer PCs. Although manufacturers will prioritize production, the market’s demand for data center equipment is so high that there is a widespread shortage. At present, Intel and AMD‘s server processors are in tight supply. Although the two CPU manufacturers have prioritized allocating production capacity to high-margin server processors instead of ordinary consumer products, they still seem insufficient to meet demand. Since the outbreak of the coronavirus epidemic, the demand for servers and data centers has increased dramatically, and with huge profits, it has become a market that major manufacturers focus on.

It takes more than three months to produce a complex chip (such as a CPU) using advanced process technology, plus testing and packaging, further extending the delivery time. The lack of components makes some OEM/ODM manufacturers unable to complete their orders on time and affects revenue.

Industry sources said that the shortage of server components is unlikely to ease before the fourth quarter of 2021 or the first quarter of 2022. If it is more pessimistic, it may continue throughout 2022.