The American technology company joins NVIDIA among the main victims of U.S. trade restrictions on China, which also halt the export of its MI308 GPU for artificial intelligence.
The recent tariffs driven by Donald Trump as part of his renewed trade strategy are having a direct and severe economic impact on major U.S. tech firms. In this case, AMD has confirmed it will have to absorb up to $800 million in additional costs resulting from the new tariffs on products coming from China, as well as the restrictions preventing the export of its artificial intelligence chips to that country.
A multimillion-dollar cost in inventory, reserves, and purchase commitments
According to AMD itself, the $800 million is broken down into charges related to stranded inventory, strategic reserves, and purchase commitments that were already made prior to the regulatory changes. This amount is less than the $5.5 billion NVIDIA has acknowledged as the impact from the sales ban of its H20 GPU to China, but it still represents a significant setback for the company led by Lisa Su.
The new tariffs imposed by the Trump administration have been progressively increasing. While initially there was talk of a 54% tariff on certain Chinese products, now some key sectors—such as technology—are already subject to rates exceeding 245%, according to reports. The goal of these measures is to reduce dependence on products manufactured in China, although their collateral effect has been immediate on the margins of companies like AMD.
The MI308 GPUs for AI, blocked from the Chinese market
In addition to the tariff costs, AMD has also been affected by the new restrictions on export licensing to China for artificial intelligence hardware. This includes the halt of sales of its MI308X GPUs, specifically designed to compete in the Chinese AI market.
These graphics units—a modified and limited version compared to the models sold in the West—are now excluded from the target market, as AMD recalls that export licenses for this type of chip have never been granted since sanctions began.
In this context, AMD considers it unlikely that it will receive authorization to sell its GPUs in China, which will imply an adjustment in its global strategy, both in terms of revenue and production planning.
A trade war with global impact
China, considered the “factory of the world,” has been the country most affected by the U.S. administration’s trade measures. This has not only impacted hardware but the entire global production chain: from mobile phones to server components, as well as consumer products like toys, calculators, or small appliances.
The result is a wave of uncertainty striking at the heart of the global tech industry, forcing companies to rethink their supply chains, renegotiate contracts, and adapt their developments to new geopolitical realities.
AMD, caught between Washington and Beijing
The case of AMD reflects the difficulties faced by many multinationals with a strong presence in both markets. While the aim of Trump’s policies is to encourage local development and production, the short term is filled with economic turbulence, especially for companies that heavily rely on international sales and a highly interconnected global value chain.
In this scenario, both AMD and other affected tech firms will need to seek new ways to diversify their production, avoid excessive dependencies, and mitigate geopolitical risks. But for now, the cost has already materialized: $800 million and an uncertain future in the largest market on the planet.
via: Reuters