Chipmaker Advanced Micro Devices (AMD) expects revenue to fall by $1.5 billion this year due to new restrictions on chips in the US that require the company to obtain a license to supply the latest artificial intelligence processors to China.
Chipmaker Advanced Micro Devices (AMD) expects revenue to fall by $1.5 billion this year due to new restrictions on chips in the US that require the company to obtain a license to supply the latest artificial intelligence processors to China.
The company issued a second-quarter revenue forecast that beat Wall Street estimates, citing customers buying more chips ahead of the tariffs. The company’s shares rose about 1% in after-hours trading after rising 6% and falling 3,5%, Reuters reported.
Under the Biden and Trump administrations, the US has imposed increasingly aggressive restrictions on the export of AI chips to China to limit the country’s ability to create advanced AI models and programs that could have implications for US national security.
AMD CEO Lisa Su said the majority of the negative impact of these restrictions will fall in the second and third quarters of this year. Despite the new controls, she expects revenue from the company’s AI data center chips to grow by «strong double digits» this year. «It’s definitely a headwind, but we think it’s well-contained given everything else we have going on,» she said.
AMD said in April it would take an $800 million loss from new U.S. tariffs on chip exports to China. On Tuesday, the company forecast adjusted gross profit margin of 43%, 11% lower than gross profit excluding those costs.
Nvidia also warned Wall Street that it would now need a license to export to China or face a $5.5 billion fine.
China accounts for about a quarter of AMD’s total revenue, and the impact of the tariffs will shave nearly 5% off Wall Street’s forecast for its revenue of $31.03 billion. AMD CFO Jean Hu said the $1.5 billion drop in revenue in 2025 is due to new export restrictions that came into effect in April.
Last December, it was reported that chipmakers Nvidia and AMD were asking partners to speed up deliveries of next-generation graphics processors to the US market in order to meet rising tariffs that could raise prices for graphics cards by 40%.
