Advanced Micro Devices Inc (AMD), Nvidia Corp’s closest rival in artificial intelligence (AI) processors, said that US restrictions on sales to China would cost US$1.5 billion in revenue this year, a warning that clouded an otherwise upbeat outlook.
The guidance stems from an export restriction imposed last month that targeted AMD’s MI308 chips, the company said during an earnings call on Tuesday.
Data center revenue would decline in the current period, hurt by a US$700 million reduction in sales of that product, AMD said.
Photo: REUTERS
Chief executive officer Lisa Su (蘇姿丰) remains bullish about overall demand for AI infrastructure. She also reiterated her projection that new chips debuting soon would help boost sales in the second half of the year. However, she is facing investor concerns about trade restrictions and tariffs, as well as the challenges of competing with Nvidia in the AI chip market.
“We’re excited about the overall AI business — I think we continue to see strength there,” Su said. “I know there are some uncertainties as it relates to tariffs and other things, but this is one of those areas where from an infrastructure standpoint, there continues to be investment in AI infrastructure. And so with that, we would expect strong growth into the second half of the year.”
Last month, AMD said it expected to record an expense of about US$800 million because of the new export rules.
Second-quarter sales are forecast to be about US$7.4 billion, the company said.
That compares with an average analyst estimate of US$7.23 billion.
AMD’s first-quarter sales rose 36 percent year-on-year to US$7.4 billion, topping the US$7.12 billion estimate. Profit was US$0.96 a share, minus certain items.
Revenue in the data center division was US$3.7 billion in the period, a gain of 57 percent from the same period a year earlier, while personal computer-
related sales climbed 28 percent to US$2.9 billion.
AMD is the second-biggest provider of graphics chips, which form the basis for the AI accelerators that run in data centers.
Nvidia chief executive officer Jensen Huang (黃仁勳) on Tuesday said that the market for AI chips in China could reach US$50 billion in the next couple of years, making it crucial for US companies to have access to the country.
“It would be a tremendous loss not to be able to address it as an American company,” Huang said in an interview on CNBC. “It’s going to bring back revenues. It’s going to bring back taxes. It’s going to create lots of jobs here in the United States.”
A recent increase in restrictions led Nvidia to book writedowns of US$5.5 billion related to its H20 product. That chip, a less powerful processor designed for the Chinese market, would now require special approval from regulators before it could be shipped to customers in that country.
“The best move is let Americans do American — let us go after it and win it,” he said, adding that the world is “hungry for AI. Let us get the American AI out in front of everybody right now.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS