Wednesday, April 16th 2025
AMD Faces $800M Loss from U.S. Chip Export Curbs to China
AMD revealed today that it anticipates charges of up to $800 million following the Trump administration's latest crackdown on exports of advanced processors to China. The company confirmed that these new rules affect its MI308 product line. The U.S. Commerce Department declared on Tuesday that it was putting in place new licensing requirements impacting several high-performance chips, including NVIDIA's H20, AMD's MI308, and similar products. This regulatory move comes at a high price for AMD, as China stands as its second-biggest market in 2024 with about $6.23 billion in revenue, over 24% of the company's total sales.
AMD's regulatory filing reveals that the company faces $800 million in charges due to inventory issues, purchase commitments, and needed reserves. AMD "expects to apply for licenses but there is no assurance that licenses will be granted,". This uncertainty grows when we consider what Jefferies analysts pointed out on Tuesday: the U.S. has never agreed on licenses for graphics processor unit shipments to China. This news comes right after NVIDIA's announcement that it would take $5.5 billion in charges because of the same export rules. As a result, AMD and NVIDIA stocks were dropping by more than 5%.
Source:
Reuters
AMD's regulatory filing reveals that the company faces $800 million in charges due to inventory issues, purchase commitments, and needed reserves. AMD "expects to apply for licenses but there is no assurance that licenses will be granted,". This uncertainty grows when we consider what Jefferies analysts pointed out on Tuesday: the U.S. has never agreed on licenses for graphics processor unit shipments to China. This news comes right after NVIDIA's announcement that it would take $5.5 billion in charges because of the same export rules. As a result, AMD and NVIDIA stocks were dropping by more than 5%.
14 Comments on AMD Faces $800M Loss from U.S. Chip Export Curbs to China
If they want to cry about not being able to sell a product to a adversarial foreign nation, ask why they don't incorporate there.... the answer is the government there would come in with guns and force them to hand over their IP (for the good of the state of course) and then charge the same fees to sell their product to us.
AMD can take the hit, its whatever. What I'm more worried about is how this will effect the supplies of 7500F's and 7400F's, if at all. Those are some of my favorite bargain bin CPU's that nobody knows about.
Now, if we take those 5.5 billions from Nvidia and add those 800 millions from AMD, we get 6.3 billions in total. So, those 800 millions are about 12.6% of that 6.3 billions. If we consider that AMD's hardware is less expensive, let's say half the price compared to Nvidia's then AMD could be selling like 1 Instinct card for every 5 H20s Nvidia sells. Not bad. Of course Chinese are probably importing the full Nvidia models from other countries, so AMD's real percentage could be lower. Obviously I am ignoring Huawei and others. Just trying to do a wild guess at AMD vs Nvidia in China.Probably they wouldn't be affected, except if US government decides to ban ALL sales in China.
What will probably be affected positively, is gaming cards. Until Nvidia and AMD manage to find new buyers for those AI accelerators, they will have a somewhat big inventory to sell. Add to that the cancellation of the manufacturing of more supply of those models affected and now they have some capacity at TSMC spare to use. Maybe there will be more capacity for gaming GPUs, at least for the next month or two?