US Gov't Reportedly Blocks AMD From Selling AI Chip To China

The United States continues to restrict China's capabilities in obtaining and manufacturing advanced semiconductor technologies, presenting significant challenges for Chinese firms and American semiconductor manufacturers that export chips to the world's second-largest economy.

A new Bloomberg report states Advanced Micro Devices Inc. is the latest company caught in the crossfire of a broadening trade war between the superpowers. Sources said US government officials have told AMD that its artificial intelligence chips for the Chinese market are too advanced to sell without a license from the Commerce Department. This presents a major hurdle for the chipmaker trying to navigate Washington's crackdown on exports of advanced technologies. 

According to the report, AMD designed the chip for lower performance to comply with US export restrictions. However, Bloomberg declined to authorize the chip's sale in China, deeming it still too advanced. The report added that the chip must obtain a license from the department's Bureau of Industry and Security. 

There is no word from the sources on whether AMD will apply for the license. But what's evident is that news is impacting the company's shares on Tuesday morning. 

Shares of AMD are lower in premarket trading in New York, down nearly 2% around 0815 ET. Notice the daily bearish candle that printed on Monday. 

The US has been racing to limit Chinese access to advanced semiconductors since the Biden administration placed export controls in 2022 and strengthened them in late 2023. Nvidia's A800 and H800 chips were recently barred from the Chinese market. 

In June, Nvidia's chief financial officer, Colette Kress, warned that export curbs on its chips to China would risk a "permanent loss" for US semiconductor firms in one of the world's largest markets. 

Meanwhile, China is countering the trade restrictions by ramping up domestic investments in advanced chip-making companies to reduce reliance on US firms. 

Trade restrictions will undermine US semiconductor firms' competitiveness in overseas markets. But don't tell the market that. 

And the trade war continues to rage on.