AMD is Set to Make a Return to Revenue With the MI308X Chip Resumption in China

Advanced Micro Devices (AMD) is getting ready to make a lot of money since the US government authorized a resumption of exporting its MI308X AI to China. The ruling, which is made after months of trade turmoil, may help AMD regain hundreds of millions in revenue as well as gain a more competitive foothold in the global AI chip war.

The China Pause and an 800 million Setback

Three months ago, AMD hit the wall of its Chinese ambitions. The company had halted sales of its MI308X chips under new US government export controls that made a priority of the advanced computational hardware that drives next-generation artificial intelligence. This sudden stop gave AMD a charge of $800 million, caused by the frozen inventory and purchase commitments.

The April quarter revealed that this resulted in a significant gross margin headwind of 1,100 basis points that pulled AMD’s gross margin guidance to 43% in the second quarter, compared with 54% before the ban. This failure shook up financial projections not just for the AMD bottom line but also on the overall chips in the AI marketplace because US competitors such as Nvidia were hit by comparable barriers operating under the same constraints.

US Policy Reversal

The US Commerce Department took the world by surprise when it informed AMD and Nvidia that the exportation of the MI308X chip and the H20 AI chip would proceed to review. It is indicating a relaxation in the harsh approach to high-technology exports to China. The new policy shift is part of a broader softening in US and China technology ties, as both appear open again to permitting the circulation of the technologically essential chip-making expertise.

AMD confirmed it would resume MI308X shipments to China once licenses are issued, and will provide a more detailed discussion during its August 5th earnings call. The announcement had instant positive sentiment on Wall Street as the stock of AMD surged by over 6%, as investors were optimistic that the company was getting its way back into the profitable Chinese market.

Revenue Potential

Evercore financial analysts say that by resuming MI308X China sales, AMD already has the risk-predicted benefit of a $300m revenue in 2025. That upside could explode to $1.5 billion in the medium term as long as there are no policy reversals in shipments. The suggested retrieval of $700 million will represent a massive recovery, as before the ban, AMD had projected its 2025 GPU revenues at $6.83 billion.

Key statistics of 2025:

Near-term estimated revenue increase of $700 million due to the restarted sales to China
Maximum upside of up to $1.5 billion medium-term. Whether and to what extent the revenue is received will be largely dependent on the timeliness and totality of the license approvals of the Commerce Department, and the speed at which buyers on the Chinese side can extend procurements.

Gross Margins

MI308X is a higher-margin AI product of AMD. Analysts at Evercore point out that a resumption of MI308X shipments will be a way to recover part of the gross margin pressure endured during a brief export pause, as completion of MI308X shipments brings in higher margins than the rest of Instinct GPU offerings at AMD.

A New Chapter or a Temporary Acquittal?

Such a reversal of export policy is at a critical time. The US trade and technology policy with President Trump has been swinging between confrontation and selective engagement. MI308X export clearance makes one wonder whether this is a lasting opening, or merely a short-term exception as the US continues its AI trade tussling with China.

In the meantime, Nvidia H20, its China-facing AI chip, was given the same allowances. It has been estimated that China represented approximately 13% of Nvidia’s total business in 2024, or $17 billion, so the stakes of this export policy are high.

Competitive Outlook and Market Impact

Having access to the Chinese market again, AMD can improve its competition against Nvidia, which still dominates the market of AI chips in the world and China. Nevertheless, the image of AMD in terms of long-term market development has become much more optimistic. AMD does not develop the MI308X as its latest solution, and it still addresses the demand of Chinese AI developers in places where Nvidia cannot.

A day after the Commerce Department announcement, investors responded as shares in AMD gained more than 6% and Nvidia was also up sharply. The price target by AMD also changed to an upwardly revised estimate of fair value at $140 per share, as compared to the prior downgrade following the April ban of $120 per share.

Looking into the Future

The restart of MI308X chip exports places AMD again on the path of aggressive growth. The investors, including analysts, will be waiting for indications on approval of licenses, volumes of shipments, and the effect on revenue due to delays in shipment as the company prepares to announce its earnings on August 5th.

In the future, the possible development of the business with AI chips in China will be influenced by the changing export policy in the United States and the rivalry with Nvidia. As high-margin products reentered the playing field and a prospective revenue boosted up to 1.5 billion dollars, AMD now stands to have a chance in building the next phase of the AI race in one of the largest markets around the globe.