Tighter US exports cost AMD 1.5 billion US dollars
After Nvidia, AMD is now also speaking out about the trade conflict with China. The company is missing out on billions in sales.
AMD's Instinct MI325X as a module for data centers.
(Image: AMD)
AMD's announcement of its latest business figures also addressed the US government's stricter export regulations. In future, manufacturers will no longer be allowed to sell AI accelerators that have been specially cut for China and fall below previous performance limits to China as a whole.
Instead, export licenses will be required. AMD does not expect to receive such licenses for the time being. In the current second quarter and the third quarter, the company is therefore expecting 1.5 billion US dollars in missed sales. This figure was quoted by company boss Lisa Su in the analyst conference on the business figures.
Just like Nvidia, AMD has designed a customized version for China, the Instinct MI308. AMD does not list the model on its own product pages, including the Chinese one. Its specifications are therefore unknown.
China is also a large market for AMD
In the current second quarter, AMD is talking about 700 million US dollars in missed sales. To put this into perspective: in the first quarter, the entire data center division generated sales of just under 3.7 billion dollars. 700 million therefore corresponds to a considerable share. Cross-product sales outside China should be able to compensate for the loss – AMD is forecasting constant total sales of 7.4 billion dollars. The Epyc and Ryzen processors in particular are currently selling well.
The non-sales will be included in the figures in future. The lack of sales and inventory costs will reduce the net margin in the so-called non-GAAP figures from 54 to 43 percent. Non-GAAP includes the company's own accounting methods outside the "Generally Accepted Accounting Principles".
Overall, AMD anticipates "expenses of up to approximately 800 million dollars for inventories, purchase commitments and related provisions" in the second quarter.
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Growth in the West
AMD plans to sell the revised Instinct MI350 accelerator series, including the Instinct MI355X, in the West towards the end of the year. There is great interest from Oracle, among others, which should enable growth in the second half of the year.
Because Nvidia is selling more AI accelerators overall, the export restrictions are hitting the company even harder. There is talk of a 5.5 billion loss in turnover.
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