Intel says demand for its data-centre and server processors remains strong, driven largely by the rapid expansion of AI infrastructure, but supply shortages are limiting how quickly the company can meet orders.

Intel chief financial officer Dave Zinsner said the global server market is expected to grow again this year after more than 20% unit growth in 2025.

“I think it’s going to be up again pretty meaningfully this year,” Zinsner (pictured) said, pointing to the surge in AI services and data-centre investment as a major driver of demand for server processors.

But Intel’s ability to capitalise on that demand is constrained by ongoing supply shortages across the semiconductor industry.

Zinsner said the company’s manufacturing facilities are currently operating at more than 100% capacity as it tries to increase production.

The supply constraints extend beyond Intel’s own factories. Shortages of key components, including memory and chip substrates, are affecting the wider semiconductor supply chain and slowing the industry’s ability to scale output.

Zinsner said supply conditions should gradually improve through the year, with stronger production expected from the second quarter onward as manufacturers ramp up capacity.

Despite the shortages, demand from customers appears strong enough that some are now seeking long-term supply agreements.

Zinsner said companies are looking to secure server processor supply through contracts lasting three to five years.

The surge is closely tied to the continued rollout of AI infrastructure, which requires large numbers of processors beyond the specialist accelerators used to train AI models.

Server CPUs play critical supporting roles in those systems, expanding the supply crunch across a broader set of semiconductor suppliers.

Investor sentiment around Intel improved following the remarks. The company’s shares rose more than 6% in New York trading on Wednesday, adding to a rally that has already seen the stock gain strongly over the past year.

Intel is currently working to restore its manufacturing leadership after losing market share to competitors in recent years.