AMD warns of $800 million charge from new U.S. chip export controls

Investing.com - Advanced Micro Devices (NASDAQ:AMD) has warned that it expects to incur a charge of up to around $800 million due to new U.S. export controls on high-end artificial intelligence chips to China.

In a filing on Wednesday, AMD said it had completed an initial assessment of the updated restrictions a day earlier, noting that the rules would apply to its MI308 chips.

A spokesperson for the U.S. Commerce Department said late on Tuesday that it was issuing updated licensing requirements for exports of processors like the MI308 as well as AMD-rival Nvidia (NASDAQ:NVDA)’s H20 and other similar products. The spokesperson said the move is in line with a directive from U.S. President Donald Trump to "safeguard [...] national and economic security."

Nvidia earlier warned that it will incur a charge of up to $5.5 billion becuase of U.S. government limits on exports of the H20 to China, one of its key markets. The H20 is the main AI chip Nvidia is permitted to sell in China under export restrictions originially imposed by the Biden administration, as Washington has sought to close off Beijing’s access to cutting-edge advancements in AI tech.  

AMD shares slumped in early trading on Wall Street, as did peers Nvidia, Broadcom (NASDAQ:AVGO), Super Micro Computer (NASDAQ:SMCI) and Intel Corporation (NASDAQ:INTC). U.S.-listed shares of major Nvidia supplier TSMC (NYSE:TSM) dropped as well.

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