TechDogs-"AMD Bets On Specific AI Chips For China Amid Export Restrictions"

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AMD Bets On Specific AI Chips For China Amid Export Restrictions

By TD NewsDesk

TD NewsDesk

Updated on Fri, Aug 4, 2023

Overall Rating
When we talk about artificial intelligence, it is impossible not to mention AMD.

The American multinational semiconductor business is in the news again as it explores developing specific artificial intelligence chips for Chinese users despite export restrictions!

The Chinese government was at the receiving end of export restrictions enacted by the United States government earlier this year. Advanced chips and chipmaking technologies cannot be sold to Chinese businesses or individuals by US vendors without permission from the US government.

Jensen Huang, CEO of Nvidia, warned that the limits might do "enormous damage" to the technology sector. Nvidia had an almost 20% year-over-year drop in revenue from China and Hong Kong in the 12 months ending in February this year.

The pressure has been felt even by Chinese businesses. According to data from China's General Administration of Customs, semiconductor imports were down roughly 30% in the first five months of this year compared to the same period in 2022 as they have banned exports to USA.

As a result, numerous semiconductor manufacturers are investigating other approaches to stabilize their revenue and explore new buyers in the market.

So, How Exactly Is AMD Changing Course?

Following in the footsteps of competitors Nvidia and Intel, AMD has stated that it intends to create an AI processor chip tailored to the Chinese market while complying with U.S. export restrictions.

On Tuesday night's results call, AMD CEO Lisa Su stated that the country is an "important" market and that AMD is committed to follow all U.S. export regulations.

While adhering to U.S. export controls is a priority when considering the accelerator market, Su noted, "We do believe there's an opportunity to develop products for our customer set in China that is looking for AI solutions and we'll continue to work in that direction."

To train massive amounts of data for artificial intelligence applications, accelerator chips are crucial, the chip maker added.
Let's delve into the master plan!

How Is AMD Preparing For The Upcoming Strategy?

In an effort to compete with Nvidia's GPUs used in AI training, AMD is planning to ramp up production of its MI300 processor and challenge Nvidia's market dominance.

The U.S. government had banned Nvidia from exporting its A100 and H100 processors to China earlier this year. One of Nvidia's most important AI processors, the H100, meant Nvidia made modifications to the H100's specifications so the chip that would pass export restrictions.

Intel also adapted an AI chip, the Gaudi 2, for the Chinese market. AMD seems to be following in their footsteps.

Why Is The Chinese Market Crucial To AMD's Success?

U.S. chipmakers continue to find success in China, especially in artificial intelligence (AI) sectors, where domestic competitors to companies such as Nvidia and Intel are limited.

The MI300 AI chip is crucial to AMD's plans to compete with Nvidia. The company anticipates that the chip will significantly contribute to the continued rapid expansion of AI adoption in China throughout the year. Su even predicted that the new AI processor would contribute to a 50% increase in AMD's data center business in the second half of the year compared to the first.

Hence, AMD expects the newly developed chips for the Chinese market will boost sales and revenue.
Will AMD's strategic pivot in making an AI chip for China strike the right chord? Or will competitors such as Intel and Nvidia rule the roost? Let us know your thoughts in the comments section below!

First published on Fri, Aug 4, 2023

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