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US Chip Exports to China: A $12.5B Windfall?
23 Dec
Summary
- AMD could gain $800 million in revenue if China sales resume.
- Nvidia's potential revenue from China could reach $12.5 billion.
- Uncertainty remains regarding China's government and U.S. export fees.
Reports indicating a possible restart of GPU sales to China have reignited discussions about the financial benefits for U.S. chip manufacturers Nvidia and AMD. Analyst Simon Leopold suggests that AMD could achieve an incremental revenue of $500 million to $800 million, coupled with a non-GAAP EPS increase of $0.10 to $0.20. For Nvidia, the financial projections are considerably higher, with an estimated additional revenue of $7 billion to $12.5 billion, potentially adding $0.15 to $0.30 to non-GAAP EPS by 2026.
Key uncertainties persist, including whether the Chinese government will permit its cloud operators to acquire advanced GPUs and how the U.S. government's 15% export license fee will be handled. Speculation for AMD centers on China-compliant accelerator orders, potentially involving 40,000 to 50,000 MI308 units for Alibaba, translating to significant sales spread over several quarters. Despite these possibilities, hurdles like approval timelines and enforcement of AI semiconductor restrictions remain.
