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.”
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