AMD has disclosed that it expects to incur substantial financial charges following the latest decision by the U.S. government to further restrict exports of cutting-edge processors to China. The affected products include AMD´s MI308 accelerator chips, designed for high-performance computing, including Artificial Intelligence workloads. The new regulatory requirements, announced by the U.S. Commerce Department, will necessitate special licenses for shipping advanced chips such as AMD’s MI308 and NVIDIA’s H20 to China—licenses that historically have not been granted for these types of products.
China is a critical market for AMD, representing its second-largest revenue stream in 2024, accounting for over 24% of the company´s total annual sales. Despite the company’s anticipation of applying for export licenses, AMD´s regulatory filings acknowledge the possible charges tied to inventory write-downs, unfulfilled purchase commitments, and additional reserve requirements. The company also warns of significant uncertainty around the likelihood of gaining the necessary export licenses, referencing analysis from Jefferies that highlights the U.S. government’s longstanding reluctance to approve such applications related to high-performance graphics processors.
The impact of the U.S. export crackdown is reverberating across the semiconductor industry. News of the restrictions closely follows NVIDIA´s separate announcement anticipating more than half a billion dollars in related charges for its own high-end chips intended for China. In the hours after the announcements, AMD and NVIDIA both saw their stock prices drop by more than 5 percent, reflecting investor concern over the future of the companies’ business in the world’s second-largest economy and intensifying regulatory headwinds for advanced processor technology exports.
