US export restrictions of advanced tech to China came as the country loosened them on Saudi Arabia.
US semiconductor giant Advanced Micro Devices (AMD) reported a higher than expected Q2 revenue at a record $7.7bn, despite losing out $800m from US export restrictions on its AI chips to China.
Earlier this year, AMD, along with competing chipmaking giants including Nvidia and Intel were hit with US license controls to export AI chips to China.
In particular, these restrictions applied to AMD’s Instinct MI308 data centre GPU chips. According to the company, its license to ship these AI chips to China is still under review by the US government.
Yet, AMD has a positive outlook for Q3, expecting the upcoming quarter’s revenue at around $8.7bn, or roughly a 28pc year-on-year growth. This is despite not including any expected revenue from the sale of MI308 to China if the US green lights the sale.
However, the US removed restrictions on advanced tech exports to the Kingdom of Saudi Arabia over the past quarter, just as it tightened them over China.
The new opportunity quickly resulted in both AMD and Nvidia announcing plans to ship thousands of their AI chips to the region via a deal with Humain, a subsidiary of the Kingdom’s Public Investment Fund.
AMD’s deal with Humain will advance AI infrastructure in the region through shipments of 500MW of AI compute capacity over the next five years, the company said.
“We delivered strong revenue growth in the second quarter led by record server and PC processor sales,” said Dr Lisa Su, AMD’s chairperson and CEO.
“We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year”.
Q2 financials showed $3.2bn in revenue from data centres, driven by a strong demand for the company’s EPYC processors which more than offset impacts from the export restrictions to China, the company said.
Client revenue hit a peak at $2.5bn and gaming revenue crossed $1bn, up 73pc year-on-year. But embedded segment was down 4pc as demand in end markets remained “mixed”, the company said.
“We achieved 32pc year-over-year revenue growth and generated record free cash flow this quarter, reflecting our disciplined execution,” said Jean Hu, AMD’s executive vice president, chief financial officer and treasurer.
“Our strategic investments across hardware, software and systems position us well to support robust future growth and drive long-term shareholder value.”
Over the past quarter, AMD announced that it is divesting from ZT Systems’ manufacturing business, to US-based company Sanmina for $3bn. The company purchased ZT last year for $4.9bn and is keeping its design and customer enablement teams.
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