Lisa Su, CEO of Advanced Micro Devices (AMD), highlighted China’s importance as a significant market for semiconductors and AI.

She noted the need to balance national security concerns with the adoption of US technology.

Su’s remarks follow AMD’s projection of a US$1.5 billion revenue loss in 2025 due to US export restrictions on chip shipments to China.

This figure includes an estimated US$800 million in costs related to its MI308 product shipments to China and other regions.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ US chipmakers face billion-dollar impact from export controls targeting China

AMD’s $1.5 billion projected revenue hit from China export controls represents a concrete example of the financial tradeoffs US tech companies face when balancing national security with commercial interests 1.

This follows a pattern across the industry, with JP Morgan estimating that Nvidia could face even larger impacts of $15-16 billion in potential revenue risk 2.

Despite these significant headwinds, AMD still reported strong performance with first-quarter revenue of $7.44 billion, a 36% year-on-year increase, demonstrating the company’s ability to grow in other markets 3.

The semiconductor export restrictions specifically target China’s access to chips that could enhance military capabilities, but they inevitably affect legitimate commercial business in what represents a substantial market. China accounts for over 24% of AMD’s overall revenue 1.

Companies are adapting by developing modified chip versions that comply with export regulations while still serving commercial customer needs, showing the industry’s resilience in navigating complex geopolitical challenges 4.

2️⃣ Export controls have systematically expanded through multiple phases since 2020

The current semiconductor restrictions are the result of a multi-year escalation that began in May 2020 when the US banned companies using American technology from producing semiconductors for Huawei, immediately disrupting its supply chain 5.

The controls expanded significantly in October 2022 with comprehensive measures targeting semiconductors critical for AI and military applications, then further strengthened in October 2023 to close loopholes and expand the scope of controlled technologies 6.

By December 2024, the US Commerce Department had implemented precise technical controls on 24 types of semiconductor manufacturing equipment and expanded its Entity List to include 140 Chinese companies involved in advanced semiconductor production 7.

Recent Advanced Micro Devices developments