AMD Reports Major Impact from China Export Licensing Rules – Affects 50% of FY 2024 Net Income Following NVIDIA’s Disclosure

This article does not constitute investment advice. The author holds no positions in any of the stocks discussed.

Market Turmoil Amidst Escalating Trade Tensions

Today’s market is experiencing significant turmoil, driven by a series of unsettling developments. The U. S.has ramped up import tariffs on goods from China, reaching an astonishing 245 percent. Adding to the chaos, ASML reported disappointing order bookings in its latest quarterly earnings, while NVIDIA anticipates a steep $5.5 billion impact on its fiscal Q1 2026 results due to stringent new export licensing requirements affecting its China-specific H20 GPU.

AMD’s Financial Forecast Takes a Hit

AMD is now part of the growing list of U. S.companies warning about the adverse financial implications of the escalating U. S.-China trade war. Following an initial evaluation of the new export licensing requirements for its MI308 GPUs, AMD projects charges amounting to approximately $800 million. This figure includes costs related to inventory write-offs, purchase obligations, and associated reserves.

The Impact of New Export Controls

The new export restrictions implemented by the U. S.government affect not only “China (including Hong Kong and Macau)” but also D:5 countries, targeting companies based in or ultimately owned by entities from these regions. Notably, AMD reported a net income of $1.6 billion in fiscal year 2024, which means the anticipated charges linked to the MI308 GPUs could significantly represent around 50% of its total earnings for that year.

Recent Policy Changes from the Trump Administration

In light of a volatile sell-off in U. S.Treasuries, the Trump administration recently introduced several de-escalatory measures. These reforms include a general import tariff rate of 10% for all U. S.trade partners, excluding China, and a temporary suspension of tariffs on semiconductor and electronic imports from China, including devices like Apple’s iPhones. Moreover, President Trump indicated that he is contemplating granting limited tariff exemptions for specific automotive companies, facilitating their transition of supply chains from Mexico and Canada. Importantly, vehicles and parts from non-China sources are still subjected to a 25% tariff.

Continued Strain on U. S.-China Trade Relations

Unfortunately, these concessions do not apply to China, which faces crippling tariffs and increasingly stringent export restrictions on critical AI-related chips. This environment signifies a deeper rift in U. S.-China trade relations, with both nations navigating treacherous economic waters.

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