AMD Projects $1.5 Billion Revenue Loss from US Curbs on China Chip Exports

AMD said on Tuesday that it will face a $1.5 billion hit this year as a result of tightened US rules requiring licenses to ship advanced artificial intelligence processors to China.

Despite the setback, the company projected second-quarter revenue of about $7.4 billion, plus or minus $300 million, exceeding analysts’ forecast of $7.25 billion.

Shares rose roughly 1% in after-hours trading after fluctuating between a 6% gain and a 3.5% drop.

Both the Biden and Trump administrations have implemented increasingly strict export controls on AI hardware to China, aiming to slow the country’s development of advanced AI models due to perceived national security concerns.

AMD CEO Lisa Su said on a conference call that most of the revenue impact would occur in the second and third quarters.

“It’s certainly a headwind, but one which we think is well contained given everything else that we have going on,” Su said.

She added that despite the restrictions, AI chip revenue from the data center segment is expected to grow by “strong double digits” in 2025.

In April, AMD announced it would take an $800 million charge tied to the new export tariffs.

On Tuesday, the company projected an adjusted gross margin of 43%, reflecting an 11-point drop when including the charge.

Like AMD, Nvidia has also warned investors it must now secure licenses to export AI chips to China, estimating a $5.5 billion impact.

China contributes about 25% of AMD’s total revenue. The new controls are projected to reduce 2025 revenue by nearly 5% from Wall Street’s $31.03 billion consensus, according to LSEG data.

AMD CFO Jean Hu confirmed the $1.5 billion hit stems from the latest export rules enacted in April.

Michael Schulman, CIO at Running Point Capital, said, “The subtext is hard to miss; big hyperscalers would rather accelerate purchase order dates than risk export license roulette once the latest China rules bite.”

He warned that “once those safety stock closets are full, Q3 could feel like the morning after a Red Bull binge … keep one eye on backlog burn rates and another on Washington’s next tariff tweet.”

Despite the geopolitical pressure, AMD’s outlook reflects continued strong demand for its AI chips, which power systems for Microsoft, Meta, and other cloud providers.

Su noted the company saw limited “tariff-related activity” in the first quarter.

In February, AMD stopped issuing specific forecasts for AI chip sales but said it expects “tens of billions” in sales over the next few years.

Data center revenue surged 57% to $3.7 billion, beating the $3.62 billion estimate.

Total revenue rose 36% to $7.44 billion, ahead of expectations.

Adjusted earnings per share came in at 96 cents, topping estimates by 2 cents.

In contrast, Marvell Technology and Super Micro disappointed investors on Tuesday.

Marvell delayed its Investor Day to 2026, citing economic uncertainty, while Super Micro cut its 2025 revenue forecast, raising doubts about its AI market position.

Marvell shares fell 4.5% in after-hours trading, and Super Micro dropped 5%.