Global CPU market demand has exceeded expectations, and AMD is accelerating the expansion of its production capacity to address the supply gap.
According to a report, AMD CEO Lisa Su stated on Friday that the CPU market is currently experiencing tight supply, with demand strength far surpassing forecasts made a year ago.
She indicated that AMD expects supply to increase sequentially each quarter this year, with a significant expansion in supply scale expected by 2027 and beyond. Su attributed this surge in demand to the rapid adoption of AI inference and agent AI.
The previous day, AMD announced an investment of over $10 billion in the AI field to deepen strategic collaborations and expand capabilities in the assembly and manufacturing of advanced AI chips. This investment covers advanced packaging, substrates, and rack-level system manufacturing, involving partners such as ASE, SPIL, PTI, Wiwynn, Wistron, Inventec, Unimicron, AIC, Nan Ya PCB, and Kinsus.
**CPU Demand Exceeds Expectations, Market Supply Remains Tight**
At a forum in Taipei, she stated clearly: "The demand in the overall CPU market is much higher than any forecast we had a year ago. I believe the CPU market is currently tight."
Su pointed out that the core driver of this demand expansion lies in the rise of agent AI. Unlike GPUs used for training large models, CPUs are regaining market focus as enterprises and organizations transition to agent AI systems capable of autonomous functions, with the demand boundary extending from GPUs to CPUs.
**Taiwan Capacity Deployment, Investments Locked In Through 2029**
AMD stated that this investment in Taiwan focuses on advanced packaging, substrates, and rack-level system manufacturing. Su explained that due to the long lead times for some investments, partners need to secure land, facilities, and manufacturing capacity in advance. Therefore, AMD is co-investing with partners to ensure expansion capacity for 2026 and beyond, up to 2029.
Regarding process technology, AMD announced on Thursday that it has begun mass production of its Venice CPU using TSMC's 2-nanometer process.
Su noted that AMD's bet on TSMC was a "very correct decision," and its second major strategic judgment—that increasingly complex chip technology requires splitting chips into smaller units and integrating them through advanced packaging—has now become a mainstream path in the semiconductor industry.
Additionally, she revealed that China accounts for approximately 20% of AMD's revenue and is a "very important" market for the company. She stated that AMD will continue to maintain close cooperation with Chinese clients, saying: "Frankly, given the market size and our product portfolio, we will continue to work very closely with our Chinese customers."
Comments