Shares of Advanced Micro Devices fell over 7% on Wednesday following a regulatory filing revealing potential charges of up to $800 million due to new U.S. export restrictions. The company stated that it anticipates these costs in connection with its MI308 products, which are now subject to heightened license requirements for exports to China and certain other countries. AMD noted it plans to apply for export licenses, but acknowledged that approval is uncertain. These potential charges would impact AMD’s inventory, purchase agreements, and related financial reserves.
The MI308 chips are part of AMD’s advanced semiconductor lineup, specifically designed to handle high-performance computing and artificial intelligence tasks. These accelerators are positioned as strong competitors in the rapidly expanding AI sector, and AMD had been capitalizing on that growth. In its most recent earnings report from February, the company reported record annual revenue of $25.8 billion for 2024. However, the new restrictions raise concerns about the company’s continued momentum in the global AI hardware market.
AMD is not alone in facing the fallout from these policy changes. Nvidia, one of its chief rivals in the AI chip space, disclosed a similar challenge earlier in the week. Nvidia announced it would take a $5.5 billion quarterly charge related to its export of H20 graphics processing units. The restrictions are part of a broader U.S. strategy to curb advanced semiconductor exports to China, aiming to limit access to technology critical for military and surveillance applications.
China remains a significant market for both AMD and Nvidia. For Nvidia, it was the fourth-largest region by revenue in the last fiscal year, trailing only the United States, Singapore, and Taiwan. More than half of Nvidia’s sales went to U.S.-based companies, illustrating the delicate balance these tech giants must maintain in a global market increasingly shaped by geopolitical tensions.
The developments mark a potential shift in growth trajectories for U.S.-based chipmakers who have leaned heavily on global demand for high-performance AI computing. The uncertainty surrounding licensing approvals could lead to further disruptions, while competitors and markets around the world adjust to a new regulatory landscape in the semiconductor industry.
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