AMD Runs into A.I. Chip Ban Roadblocks in Selling to China

Are China tariffs and AI chip bans really the long-term answer for U.S. dominance?

Hey Everyone,

• Welcome to the second (2nd) edition of Semiconductor Things™, where I seek to break down some of the news in the Semiconductor, AI chips and datacenter space globally to make it more accessible and easy to follow.

• There are already some great Semiconductor related Newsletter on Substack, incredible people to follow on X and a plethora of specialized blogs.

• With the rise of Generative AI, Nvidia and TSMC and the geopolitical importance of Taiwan, this is now a major topic of me in my watching of the emerging tech space that I do as an analyst, writer, curators and news watcher.

• I will be doing a survey of the top Semiconductor Newsletters on Substack at a later date.

• The Technology category is an underdog relative to Substack’s baseline audience, this means I’m an outlier here. To survive, I’m building 8+ Newsletters in “emerging tech” coverage. A pilot never seen before on Substack for a one-person team. Full disclosure, I may not make it.

• Importe note: I am not native to the Semi space, and it might take a while to get up to speed.

🙏 Recent Interest in my New Newsletter

• Thank you Brannon Jones:

• I got above average interest in the launch of this Newsletter exploring semiconductor and AI Chips topics. It’s at a super accessible price point.

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Can AMD rise to Compete with Nvidia?

Advanced Micro Devices, Inc. is an American multinational corporation and semiconductor company based in Santa Clara, California, that develops computer processors and related technologies for business and consumer markets. They were founded in 1969. I’m a big fan of their CEO, Lisa Su (pictured above).

I’m watching their MI300 chips.

After Nvidia, AMD has the best chance of taking marketshare in AI chips and GPUs used by Generative AI startups and high-demand sectors for the overall trend.

AMD’s stock is up 48% so far in 2024 and in their last earnings they forecasted a $45 billion AI chip market this year, with $2 billion in sales in 2024 for AMD itself.

The U.S. export ban of AI chips to China however might limit AMD’s ability to scale demand and increase their marketshare relative to Nvidia. One of the biggest stories this week is that they have hit a snag.

• AMD will reportedly need an export license for its made-for-China chips which it had hoped could skirt U.S. trade restrictions on semiconductor sales to China.

• The news comes as American semiconductor companies try to adjust their China strategies, and U.S. regulators move to close what they see as trade loopholes.

• Advanced Micro Devices reportedly failed to make the artificial intelligence chip it tailored for the Chinese market weak enough to be sold without a license from the Commerce Department.

The China AI Chip Export Bans are Forcing China to Innovate

Curiously the Biden Administration thinks forcing China to innovate and find work-arounds is a good idea. But what happens when China becomes more self-sufficient in the semiconductor industry? It might take years or a decade or two, but when they do China will be very difficult to compete against.

• The A.I. Chip bans are always hurting the bottom lines of firms like Nvidia and AMD, who could make around 20% more revenue with full-access to China as an ecosystem.

I mentioned recently how China has already five serious foundational AI startups. But they might struggle to find necessary AI chips and GPU equivalents to compete on a level playing field.

Breaking: Alibaba Invests in another Chinese AI Startup