CPU Market in Peril With Fears of Tariffs Causing Intel and AMD to Adjust, Surging Shipments Nationwide
The discovery of the unusual surge in CPU shipments in the second quarter of 2025 has revealed considerable concerns in the PC market due to tariff uncertainty. This short-term market response is symptomatic of a much wider geopolitical-economic switch that is forcing the industry giants Intel and AMD to radically rethink their core business strategies for the future.
The Curious Market Spike
Data collected by Jon Peddie Research (JPR) show that customer CPUs underwent strong growth of 7.9 percent from Q1 to Q2 of 2025, with shipments increasing from nearly 62 million to beyond 67 million units. This is an abnormal growth for what are usually very flat periods. JPR president Jon Peddie attributes most of the increase to a hoarding frenzy ahead of impending tariffs; the arrival of AI PCs as a factor is minor.
The server section also exhibited strong growth, registering an increase in shipments of 22% over the prior year.
The Playing Field AMD Gaining Ground
AMD has gained ground with a 25% to 27% increase over the previous year, which stems from what the company cites as superior performance across the line.
Strategic Repositioning in an Unpredictable World
Intel has to make a strategic shift in light of a new and probably drastic set of tariffs to de-risk its operations as well as regain leadership in the market.
"Demand Before Capital" Playbook of Intel
Execution of a very conservative, financially disciplined strategy is now being taken under new CEO Lip-Bu Tan, which is considered by Bank of America (BofA) to be a credit positive new direction. Tenets of this are:
- Demand Secured First: Intel will receive commitments from customers for the coming 14A node before any major capital expenditure (CapEx) occurs, which lessens the financial risk and causes Intel to operate more like a fabless semiconductor company.
- Job Cuts: It continues with a shrinking workforce, and manufacturing plants in Germany and Poland are closed so that Intel will save costs via reduced overhead.
- Debt Training: This new approach will help Intel manage its debt obligations through its existing cash balance and potentially avoid the need for issuing new debts.
Manufacturing Risk vs AMD's Performance Edge
Today, AMD's successes occur on the efficient utilization of chips produced by TSMC of Taiwan that have been found helpful but, as the information above states, might translate to a liability should the new tariffs, setting up 100% tariffs on all chips not produced in America, come into force. Despite Intel's expansion of its fabs within the U.S., the lack of such from AMD created a distinctive geopolitical risk that may exert influence over its pricing and competitiveness.
Where Do We Go from Here
Indeed, the CPU market is at the crossroads today: political volatility lies alongside an immediate inventory rush with companies changing their manufacturing and financial models for the long haul. On one hand, an Intel strategy, traditionally conservative and focused on the US market, fluctuates against an AMD performance-driven fabless model. Both strategies serve as blueprints on how to survive a complex and unpredictable global market today.
