AMD Faces Significant Financial Hit Due to New US Export Controls

Advanced Micro Devices Inc. (AMD) experienced a sharp decline in its stock price, dropping 5.79% following a warning in a recent SEC filing. The company anticipates potential charges up to $800 million due to new US export controls affecting its MI308 semiconductor products. These restrictions specifically target sales to China, including Hong Kong and Macau, as well as D:5 countries.

Attempts to Mitigate Impact

AMD has announced plans to apply for licenses in response to these restrictions. However, the company has openly admitted that there is no certainty these applications will be approved, adding a layer of uncertainty to its financial outlook.

Broader Implications for the Chip Sector

This development is part of a growing trend of challenges within the chip sector, exacerbated by the implementation of tariffs. Similar restrictions have previously impacted other tech giants, such as Nvidia, which estimated a $5.5 billion sales loss from analogous measures targeting AI chips. The US government defends these actions as necessary for national security, while the tech industry warns of the escalating effects of US-China tech tensions.

At 9:44 am ET, shortly after the market opened, AMD's stock was trading at $89.775 per share, marking a significant 5.79% drop.