AMD says US rule on chips to China could cost it $800 mn / Photo: PAU BARRENA - AFP
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AMD says US rule on chips to China could cost it $800 mn
Chip developer Advanced Micro Devices (AMD) on Wednesday said it expects new US licensing requirements for semiconductors exported to China to cost it as much as $800 million.
The Silicon Valley company's earnings warning, filed with the US Securities and Exchange Commission (SEC), came a day after rival Nvidia notified regulators that it expects a $5.5 billion hit this quarter from licensing requirements on the main chip it can legally sell in China.
Shares in both companies were down by about 7 percent at the close of formal trading on Wednesday.
The new US export control measure applies to MI308 graphics processing units (GPUs) designed for high-performance applications like gaming and artificial intelligence, AMD said.
AMD said in the filing that it "expects to apply for (export) licenses but there is no assurance that licenses will be granted."
The $800 million earnings blow it forecast would come from charges in "inventory, purchase commitments and related reserves," it added.
Wall Street stocks overall tumbled Wednesday as the Federal Reserve chief warned of the drag from President Donald Trump's tariffs, with Nvidia sinking on costs connected to the US-China trade war.
US officials last week told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the Silicon Valley company said in a SEC filing.
The United States had already restricted exports to China of Nvidia's most sophisticated GPUs, tailored for powering top-end artificial intelligence models.
Nvidia was told the licensing requirement on H20 chips would last indefinitely, it said in the filing.
Chief executive Jensen Huang has said publicly that the AI chip powerhouse will balance legal compliance and technological advances under Trump, and that nothing will stop the global advancement of artificial intelligence.
"We'll continue to do that and we'll be able to do that just fine," the Taiwan-born entrepreneur told reporters late last year.
Trump's predecessor Joe Biden restricted Nvidia from selling some of its top AI chips to China, which the United States sees as a strategic competitor in high tech.
P.L.Madureira--PC
