MW AMD's stock falls on latest China export setback. Which chip companies are next?

By Emily Bary

AMD joins Nvidia in putting a dollar figure on expected write-offs from new export-license rules. One analyst wonders if Broadcom faces risk as well.

Advanced Micro Devices Inc. followed Nvidia Corp.'s lead on Wednesday, putting a dollar value on the amount of inventory it plans to write down related to new export restrictions on chips to China.

AMD's $(AMD)$ filing came in response to new government rules that will require licenses for some semiconductor products sold in the Chinese market, including Macau and Hong Kong. AMD "expects to apply for licenses but there is no assurance that licenses will be granted," the company said.

As such, AMD expects the new rule could lead to about $800 million in charges related to inventory, purchase commitments and related reserves. The company's MI308 products are affected by the license requirement.

Shares of AMD are down 5.6% in morning trading Wednesday.

The development is a setback for AMD, which Mizuho desk-based analyst Jordan Klein noted "was seeing surging demand from China customers unable to get supply of H20 chips," or the rival ones made by Nvidia Corp. $(NVDA)$ He noted that the MI308 business might generate "a few billion" dollars worth of annual revenue for AMD.

Read: As Nvidia's stock sinks on China setback, here's Wall Street's big question

Klein wondered whether Broadcom Inc. $(AVGO)$ would be "the next target" for the government, as the company sells application-specific integrated circuits for artificial-intelligence and does design work for ByteDance Ltd. The development also seems negative for chip-equipment companies such as Applied Materials Inc. $(AMAT)$, KLA Corp. $(KLAC)$ and Lam Research Corp. $(LRCX)$, he added.

The chip-equipment companies "have already lowered China [revenues] due to tighter U.S. export controls" over the past six months, but he said reports indicate further revenue risk.

Broadcom's stock is down 2.9% on Wednesday, while KLA's stock is leading semiconductor-equipment stocks lower with its 3.6% decline.

Micron Technology Inc. $(MU)$, Klein added, is "pretty restricted," and direct sales of its dynamic-random access memory products to China's market are "fairly low." The stock is still down 2.8% in morning action.

Nvidia late on Tuesday put out its own warning about the new China-license rules, saying it expected to take a $5.5 billion write-off related to H20 inventory. Its stock is down 5.5% on Wednesday.

See also: Nvidia to record $5.5 billion in charges due to U.S. export ban on its H20 chip for China

-Emily Bary

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April 16, 2025 10:07 ET (14:07 GMT)

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