The CPU market is once again entering a phase of price increases, coinciding with the surge in Artificial Intelligence, almost juxtaposed with the broader economic climate. Since March, consumer CPUs have reportedly seen price hikes of between 5% and 10%, as previously reported. Meanwhile, server CPUs are experiencing increases ranging from 10% to 20%. The issue is compounded by the supply chain anticipating another round of increments for the 3rd quarter, indicating that the pressure is more than just a temporary adjustment. Unfortunately, both Intel and AMD are preparing for another round of price increases on their CPUs.
Within the industry, two primary, recurring reasons are cited. The first is the significant demand from AI servers, and the second relates to production. The available capacity for advanced manufacturing processes remains highly concentrated and is not keeping pace with demand.
Intel and AMD Prepare for Round 2: New CPU Price Hikes Across All Sectors
Intel made its move weeks ago, with price adjustments in March for its PC CPUs and another on April 1st for server CPUs. These changes are believed to have boosted gross margins in the second quarter. Looking ahead to the second half of the year, the market anticipates another potential increase of between 8% and 10%, signaling that the gap between supply and demand will persist.
AMD is also part of this new wave. The company reportedly acknowledges market expectations of two price increases for its server CPU line, one in the 2nd quarter and another in the 3rd quarter. Cumulatively, this would result in an increase of between 16% and 17% for Lisa Su’s company. This all comes as 1.8nm, 2nm, and 3nm processes are advancing in mass production and capacity expansion. CPUs, GPUs, TPUs, NPUs for Artificial Intelligence, and ASICs are all competing for the same wafers simultaneously. Clearly, there isn’t enough to go around for everyone, at least for now.
TSMC and Intel Face Intense Pressure to Increase Production Capacity and Yields
TSMC is also experiencing significant pressure. Reports from Taiwan indicate that the company continues to expand its 3nm capacity, which is unusual for a process that is already mature and nearing displacement by its newer, faster, and more efficient N2 sibling.
Within the supply chain, this decision is linked to the simultaneous growth in demand for both CPUs and ASICs for Artificial Intelligence. According to available information, this includes major CPU generations from Intel and AMD, as well as NVIDIA’s future Vera CPU.
Furthermore, Intel announced the repurchase of a 49% stake in its Fab 34 plant in Ireland for $14.2 billion to regain control of its production capacity. This factory is a key facility for Intel 4 and Intel 3 and is among the company’s most productive advanced process plants. Intel also needs to accelerate its efforts with Intel 18A, not only for its own use but also for its partners and clients.
By the end of 2026 and into 2027, industry forecasts continue to point towards a very tight market, with the bottleneck being capacity rather than demand, until limitations in advanced manufacturing and packaging are resolved. Regardless, the fact that Intel and AMD are implementing further price increases on their CPUs is not good news, especially after graphics cards, DRAM, and NAND Flash, processors are now also affected. What’s next? Likely motherboards and PSUs, due to a scarcity of raw materials directed towards these components.
