Advanced Micro Devices (AMD) has forecast a $1.5bn decline in revenue for 2025, attributing the anticipated shortfall to recent US restrictions on exports of advanced semiconductors to China. The projected loss stems from tightened trade controls that now require export licences for shipments of AI-related chips to Chinese customers.
China currently contributes over 24% of AMD’s total revenue, making it a significant market for the company’s AI and data centre products. The export limitations are expected to weigh heavily on AMD’s sales in the second and third quarters of the year. The updated guidance highlights the broader implications of US policy changes aimed at restricting Beijing’s access to high-performance computing technology.
Despite the forecasted decline, AMD reported first-quarter revenue of $7.44bn, marking a 36% year-on-year increase. Adjusted earnings per share for the period came in at 96 cents, surpassing analyst expectations. The company’s data centre division contributed $3.7bn in sales, a 57% increase from the previous year, largely driven by ongoing demand for AI-related compute infrastructure.
AI demand expected to offset near-term pressures
For the second quarter, AMD anticipates revenue to remain steady at around $7.4bn. The outlook includes a boost from clients accelerating procurement to avoid potential future tariffs or supply disruptions. The company also expects sustained growth in its AI business, with strong demand projected to drive double-digit increases in data centre revenue in the coming quarters. “We expect strong growth in our data centre business driven by AI, even as we navigate the export restrictions,” said AMD CEO Lisa Su.
The revised guidance follows a broader trend affecting the semiconductor industry, as several US-based chipmakers adjust forecasts in response to evolving trade policy. Nvidia recently disclosed a $5.5bn impact linked to similar export constraints, indicating the scale of the disruption across the sector.
The semiconductor market has been navigating heightened geopolitical scrutiny, with Washington continuing to target advanced chip technologies over national security concerns. The export controls apply to chips capable of supporting generative AI applications and other high-performance computing functions deemed sensitive.
Investor response to the update has reflected uncertainty around future sales prospects in China, although AMD’s overall performance in AI and server processors has signalled ongoing demand strength in non-restricted markets.
AMD has not disclosed specific changes to its supply chain or manufacturing strategy but indicated it remains focused on addressing international demand and complying with regulatory conditions set by the US government.
In March 2025, AMD closed the $4.9bn acquisition of hyperscale server specialist ZT Group International, known commercially as ZT Systems. This was after clearance from the European Commission. The acquisition is expected to support the development of end-to-end AI solutions by combining AMD’s CPU, GPU, and networking components with its open-source ROCm software and rack-scale systems capabilities.
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