What was the impact of the U.S. export controls on AMD's business?

AMD reported an $800 million charge due to restrictions on shipments of its MI308 chip to China, which pressured the company's profitability and caused its adjusted earnings per share to miss analyst expectations.

Home / Business and Economy / AMD Shares Plunge 6.7% After $800M Inventory Charge from China Export Curbs

AMD Shares Plunge 6.7% After $800M Inventory Charge from China Export Curbs

Q: How did AMD's Q2 2025 revenue performance compare to the previous year?

AMD posted record quarterly revenue of $7.7 billion, a 32% year-over-year increase.

Q: How did the broader economic and trade environment affect the semiconductor industry?

The U.S. jobs report for July 2025 showed a significant slowdown in job growth, while the White House announced new tariffs, including a 20% levy on imports from Taiwan, a global hub for chip manufacturing. This dual shock of slowing domestic growth and trade uncertainty has created a challenging outlook for the highly cyclical semiconductor industry.

6 Aug

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Summary

AMD posts record $7.7B revenue, up 32% YoY
$800M charge due to U.S. export controls on data center chips
Adjusted EPS of $0.48 misses analyst expectations
Gross margin narrowed significantly from previous year

AMD Shares Plunge 6.7% After $800M Inventory Charge from China Export Curbs

On August 6, 2025, semiconductor company AMD (NASDAQ:AMD) reported its second-quarter financial results, which were overshadowed by a significant inventory charge related to U.S. export controls on its data center chips.

The company posted record quarterly revenue of $7.7 billion, a 32% year-over-year increase. However, AMD also revealed an $800 million hit due to restrictions on shipments of its MI308 chip to China. This charge weighed heavily on the company's profitability, causing its adjusted earnings per share to come in at $0.48, missing analyst expectations.

The export curbs also squeezed AMD's gross margin, which narrowed significantly from the previous year. Investors reacted negatively to the earnings miss and margin pressure, despite the strong sales figures, sending the stock down 6.7% in the afternoon session.

The news comes amid broader concerns about a potential economic slowdown and renewed trade friction between the U.S. and China. The U.S. jobs report for July showed a significant slowdown in job growth, while the White House announced new tariffs, including a 20% levy on imports from Taiwan, a global hub for chip manufacturing. This dual shock of slowing domestic growth and trade uncertainty has created a challenging outlook for the highly cyclical semiconductor industry.

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