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2025-04-16 13:37:13
AMD Tumbles After Warning Of $800 Million Hit From U.S. Export Chip Controls
AMD Tumbles After Warning Of $800 Million Hit From U.S. Export Chip Controls
Update (0937ET):
The U.S. Commerce Department announced new export licensing requirements Tuesday evening for Nvidia's H20 AI chips and AMD's MI308 chips bound for China. In response, Nvidia disclosed that it would incur a $5.5 billion charge due to the restrictions on H20 exports, while AMD revealed that it could face nearly $1 billion in related charges from the new export controls.
*AMD SEES UP TO $800M CHARGES FROM US EXPORT CONTROLS ON MI308
— zerohedge (@zerohedge) https://twitter.com/zerohedge/status/1912494499344896304?ref_src=twsrc%5Etfw
In an 8-K filing on Wednesday morning, AMD stated it plans to apply for export licenses for its MI308 AI chips to China but noted no guarantee it will be approved. The chipmaker expects charges of up to $800 million:
On April 15, 2025, Advanced Micro Devices, Inc. (the "Company") completed its initial assessment of a new license requirement implemented by the United States government for the export of certain semiconductor products to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent in such countries (the "Export Control").
The Export Control applies to the Company's MI308 products. The Company expects to apply for licenses but there is no assurance that licenses will be granted. The Company expects that the Export Control may result in charges of up to approximately $800 million in inventory, purchase commitments and related reserves.
On Tuesday, the Commerce Department called the new export licensing requirements for the two U.S. chipmakers necessary and said it is "committed to acting on the President's directive to safeguard our national and economic security."
In markets, AMD shares were down around 8%.
https://cms.zerohedge.com/s3/files/inline-images/unnamed-1_48.png?itok=WxkzwUO9
Nvidia shares were down about 7%.
https://cms.zerohedge.com/s3/files/inline-images/unnamed_1053.png?itok=i1Twxb4p
Sliding AMD and Nvidia shares added pressure on Nasdaq 100 futures, down around 1.8% in the early U.S. session.
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Nvidia tumbled in afterhours trading after the company said the US government will begin requiring a license to export the company’s H20 chips to China, an escalation of restrictions that the company has publicly opposed.
The government informed Nvidia on Monday that such a license would be in effect “for the indefinite future,” the company said in an https://www.sec.gov/ix?doc=/Archives/edgar/data/0001045810/000104581025000082/nvda-20250409.htm
. The company now expects to report charges of about $5.5 billion during the fiscal first quarter from “inventory, purchase commitments and related reserves” tied to the H20 line, Nvidia said.
On April 9, 2025, the U.S. government, or USG, informed NVIDIA Corporation, or the Company, that the USG requires a license for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent therein, of the Company’s H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth, interconnect bandwidth, or combination thereof. The USG indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China. On April 14, 2025, the USG informed the Company that the license requirement will be in effect for the indefinite future. - https://www.sec.gov/ix?doc=/Archives/edgar/data/0001045810/000104581025000082/nvda-20250409.htm
As a reminder, the H20 is a scaled-down chip that was designed to comply with US export regulations and has been Nvidia's primary AI GPU legally available for sale in China after the H100/A100 were banned.
Bloomberg News reported in January that the Trump administration was exploring such a step.
NVDA stock tumbled as much as 7% in afterhours trading as the market tried to make sense of this latest escalation in the trade war.
https://cms.zerohedge.com/s3/files/inline-images/NVDA%202025-04-15_18-00-55.jpg?itok=Of0SViVm
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Wed, 04/16/2025 - 09:37
https://www.zerohedge.com/markets/nvidia-plunges-after-us-imposes-license-h20-chip-sales-china-slaps-company-55-billion