AMD Faces $1.5 Billion Revenue Loss Due to US Export Controls on AI Chips to China
AMD Faces $1.5 Billion Revenue Loss Due to US Export Controls on AI Chips to China
AMD is facing a significant financial setback due to new US export controls on advanced AI chips to China, with a projected revenue loss of $1.5 billion in 2025. This impact is attributed to tightened trade rules that now require export licenses for shipments of AI-related chips to Chinese customers. China is a crucial market for AMD, contributing over 24% of its total revenue, particularly in AI and data center products.
AMD CEO Lisa Su addressed the situation, stating that while the export restrictions pose a headwind, the company expects strong growth in its data center business driven by AI demand. She emphasized that most of the revenue impact will occur in the second and third quarters of 2025. Despite the challenges, AMD reported a 36% year-on-year increase in first-quarter revenue, reaching $7.44 billion, with adjusted earnings per share surpassing analyst expectations at 96 cents.
The export controls are part of broader US policy changes aimed at restricting China's access to high-performance computing technology due to national security concerns. Similar restrictions have affected other US-based chipmakers, such as Nvidia, which disclosed a $5.5 billion impact from the same export constraints.
AMD remains focused on addressing international demand and complying with US regulatory conditions. The company has not disclosed specific changes to its supply chain or manufacturing strategy but continues to invest in its AI business. In March 2025, AMD completed the $4.9 billion acquisition of ZT Group International, which is expected to enhance its capabilities in developing end-to-end AI solutions.
Investor response to the updated guidance has been mixed, reflecting uncertainty around future sales prospects in China. However, AMD's strong performance in AI and server processors in non-restricted markets signals ongoing demand strength.
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