(August 6): Advanced Micro Devices Inc (AMD), the second-largest manufacturer of artificial intelligence (AI) processors, said Chipmaker's return to the key Chinese market is difficult to predict and will overshadow the general bright forecasts of the AI business.
As part of Tuesday's quarterly revenue report, AMD declined to forecast China's sales of Instinct MI308, an AI processor that the company designed for the Asian country. Uncertainty is the weight of the stock, falling about 5.2% in pre-market trading on Wednesday before the New York exchange opened.
AMD CEO Lisa Su said the AI business will add hundreds of billions of dollars.
The Trump administration banned China from shipping such chips in April, but it overturned the course last month, hoping that AMD and rival Nvidia Corp will be able to resume sales soon. China is the largest market for semiconductors, and it threatens to erase billions of dollars in total revenue from both companies due to restrictions.
“We have not included MI308 revenue in our third quarter guidance as our licenses are still under review,” Su said in a conference call with analysts.
Su was optimistic about the overall AI computing market. “Looking ahead, we see a clear path to expanding our AI business to tens of billions of dollars in annual revenue,” she said over the phone. The company is also increasing its lineup of new MI350s, she said.
The stock won 44% through its closing in 2025, with AMD performing at its best in the semiconductor industry.
Three months ago, AMD said it needed US$800 million (RM3.38 billion) in writedowns related to China's export restrictions, warning that this year's curb would cost US$1.5 billion in revenue. Wall Street was waiting for guidance on how it changed given the US policy change.
During the conference call, analysts repeatedly sought a specific outlook on how much China's revenue the company would generate. They also tried to commit to long-term forecasts of the overall revenues of the AI chip.
But Su and Chief Financial Officer Jean Hu are sticking to their message. Executives are confident in the AI market, but details remain difficult to predict. They said that previous writing of Chinese stocks could not be converted into revenue, as they had incomplete chips that required further manufacturing work.
Despite the uncertainty, AMD's third quarter revenue forecasts easily cleared analyst estimates. The company said its revenue would be around US$8.7 billion.
Second quarter sales increased 32% to USD 7.7 billion, compared to an estimated average of USD 7.43 billion. The earnings were 48 cents per share, minus certain items. Analysts predicted 49 cents. Datacenter revenues earned between 14% and USD 3.2 billion over that period. On average, analysts were forecasting US$3.25 billion. Personal computer-related sales increased 67% to US$2.5 billion. The average forecast was USD 2.56 billion.
In the decade since Su took the top job at AMD, the company has become a leading provider of technology across the computing industry. The ability of the longtime Nemesis Intel Corp to deliver competitive products when it stumbled has resulted in a reversal of wealth.
AMD's market capitalization is currently about USD 220 billion higher than Intel's market capitalization. Still, neither company is consistent with the success of Nvidia's runaway run, which has made the AI accelerator dominance the most valuable business in the world.
AMD is the second largest provider of graphics chips that underlie AI accelerators running in data centers. Meanwhile, its microprocessors are heading straight for Intel products in the personal computer (PC) and server market.
Uploaded by Liza Shireen Koshy
