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AMD Takes a Bigger Revenue Hit than Microsoft from Huawei Ban: Goldman Sachs

btarunr

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The trade ban imposed on Chinese tech giant Huawei by the U.S. Department of Commerce, and ratified through an Executive Order by President Donald Trump, is cutting both ways. Not only are U.S. entities banned from importing products and services from Huawei, but also engaging in trade with them (i.e. selling to them). U.S. tech firms stare at a $11 billion revenue loss by early estimates. Wall Street firm Goldman Sachs compiled a list of companies impacted by the ban, and the extent of their revenue loss. It turns out that AMD isn't a small player, and in fact, stands to lose more revenue in absolute terms than even Microsoft. It earns RMB 268 million (USD $38.79 million) from Huawei, compared to Microsoft's RMB 198 million ($28.66 million). Intel's revenue loss is a little over double that of AMD at RMB 589 million ($84 million), despite its market-share dominance.

That's not all, AMD's exposure is higher than that of Intel, since sales to Huawei make up a greater percentage of AMD's revenues than it does Intel's. AMD exports not just client-segment products such as Ryzen processors and Radeon graphics, but possibly also EPYC enterprise processors for Huawei's server and SMB product businesses. NVIDIA is affected to a far lesser extent than Intel, AMD, and Microsoft. Qualcomm-Broadcom take the biggest hit in absolute revenue terms at RMB 3.5 billion ($508 million), even if their exposure isn't the highest. The duo export SoCs and cellular modems to Huawei, both as bare-metal and licenses. Storage hardware makers aren't far behind, with the likes of Micron, Seagate, and Western Digital taking big hits. Micron exports DRAM and SSDs, while Seagate and WDC export hard drives.



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Hmm..
I could say Intel took a bigger hit than AMD in the revenue section, and more exposure than Microsoft.

What is the point of this title?
 
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Benchmark Scores They're pretty good, nothing crazy.
They take a smaller hit than intel... bit more exposure tho.

Rather take the hit than use compromised hardware
 

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They take a smaller hit than intel... bit more exposure tho.

Rather take the hit than use compromised hardware

Intel's hit is only 2.19x that of AMD, despite its roughly 6x global market share. Also, as you said, AMD's exposure is higher.

So a company that has nothing to do with Huawei loses out, because the entire stock market is down. Which has what to do with anything exactly?

AMD doesn't have nothing to do with Huawei.
 

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Didn't AMD just last year sign some deal to let the Chinese build CPUs based on Zen? Of course it now hurts them more. Let's just hope it's worth it in the long run.
 
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Goldman Sachs also "assumed" that Nvidia is solid performer, despite almost everybody knew it will take hit from crypto currency's fall


Then Nvidia took a major hit
 
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Look at all those jobs lost
 
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This is bad "Tariffs on the targeted exports increased from 10% to 25%"

123395
 
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Intel's hit is only 2.19x that of AMD, despite its roughly 6x global market share. Also, as you said, AMD's exposure is higher.

I think it should say AMD take a bigger hit in relative terms (i.e. relative to their size/income etc.), not absolute, as in absolute terms (actual dollars) Intel are taking a bigger hit.
 
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I think it should say AMD take a bigger hit in relative terms (i.e. relative to their size/income etc.), not absolute, as in absolute terms (actual dollars) Intel are taking a bigger hit.
It's comparing the hit they take with Microsoft not Intel so it is correct.

It earns RMB 268 million (USD $38.79 million) from Huawei, compared to Microsoft's RMB 198 million ($28.66 million)
 
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D

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Pricing spike incoming for companies affected, really not a good time to buy soon...
 
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It's comparing the hit they take with Microsoft not Intel so it is correct.

Thanks for the clarification, the comment I quoted mentioned Intel, hence the confusion.
 
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amd shouldn't have made a deal with the devil...
 
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More sensationalist journalism. The FACT is no one knows how much it will end up costing any company. Just because AMD has a higher percentage os sales to Huawei means zero. You would have to wait a year before you could even check.

Fact is Huawei is gone from the market. Who will supply those products to customers now? Who will supply the hardware? For example, If Samsung's sales rise 20% and AMD supplies Samsung they lose nothing.

Click-bait at it's finest.

amd shouldn't have made a deal with the devil...

So naive and flameworthy. EVERY tech company sold Huawei hardware . Are you that blind? They made no deal except to sell their products to someone.
 
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Oh, fudge, the end of the world is coming! AMD, Intel and MS will loose a few million of dollars worth of comerce...
How much % is that in their budget? Like a small fries portion of my personal budget?

GJ! That really helped the US economy.
But at least we don't have to fear the red boogeyman spying on us, right?
Please China, give me cheap stuff, I am willing to give you evertying I don't care about, like my privacy and even freedom.

So we will have higher CPU, GPU and HDD prices.
Oh, gosh, I cannot buy anymore those great Huawei CPU, GPU and HDD's? OMG, I am devastated!

Fact is Huawei is gone from the market. Who will supply those products to customers now? Who will supply the hardware? For example, If Samsung's sales rise 20% and AMD supplies Samsung they lose nothing.
Nailed it. It's a demand and supply world...

Didn't AMD just last year sign some deal to let the Chinese build CPUs based on Zen? Of course it now hurts them more. Let's just hope it's worth it in the long run.
Why? Do you think that the Chinese will retaliate and don't get the free technology from AMD? Never! That's how they raised from a failed agrarian state of the 80's to the superpower that they are now.
The new idea was that all workers should not be paid the same, but rather, paid according to their productivity.
Fun fact: "On December 5, 1978 in Beijing, former red guard Wei Jingsheng posted on the Democracy Wall the Fifth Modernization as being "democracy". He was arrested a few months later and jailed for 15 years."
 
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Oh, fudge, the end of the world is coming! AMD, Intel and MS will loose a few million of dollars...
How much % is that in their budget? Like a small fries portion of my personal budget?

Pocket change. From MS 2018 Annual Financial Report:

Revenue 110.3 billion dollars
Gross Margin 72 billion dollars
Net Profit 16.5 billion dollars

and they are sitting on 133.7 billion dollars in cash and equivalents

I think MS will be just fine.
 
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Hmm..
I could say Intel took a bigger hit than AMD in the revenue section, and more exposure than Microsoft.

What is the point of this title?

You're reading/interpreting the graphs wrong. Smaller is better. First graph is how big the chunks of revenue are and the exposure is what % of their revenue stream did that junk represent. It hardly made a dent in MS/Intel revenue to the point they probably didn't notice.
 
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Didn't AMD just last year sign some deal to let the Chinese build CPUs based on Zen? Of course it now hurts them more. Let's just hope it's worth it in the long run.

THATIC is a joint venture designed to let a China Majority company sell EPYC derived chips into the CHINA market. Tariffs should have no effect on those sales. AMD gets paid in royalty payments based on Unit sales according to Toms Hardware and recognize $293M for the IP Licensing.


I'm assuming AMD was planning for this vehicle to be used for sales into China. This should allow it to avoid Tariff affecting revenue, at least on EPYC parts and hopefully displace Intel server CPUs in the China Server market. Another well placed chess move by AMD.
 
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You're reading/interpreting the graphs wrong. Smaller is better. First graph is how big the chunks of revenue are and the exposure is what % of their revenue stream did that junk represent. It hardly made a dent in MS/Intel revenue to the point they probably didn't notice.
iirc with AMD's latest financials their revenue was 1.25bn per quarter give or take so even at 38m a year Huawei probably accounts for >1% revenue for AMD, you could say it was hardly a dent for AMD though I'm sure they would rather have kept the % regardless of what it was. And of course gross margin for AMD (which is what really matters) is a LOT lower.
 
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THATIC is a joint venture designed to let a China Majority company sell EPYC derived chips into the CHINA market. Tariffs should have no effect on those sales. AMD gets paid in royalty payments based on Unit sales according to Toms Hardware and recognize $293M for the IP Licensing.


I'm assuming AMD was planning for this vehicle to be used for sales into China. This should allow it to avoid Tariff affecting revenue, at least on EPYC parts and hopefully displace Intel server CPUs in the China Server market. Another well placed chess move by AMD.
I'd be more precautious against a downturn, despite legal courtesy. This is not a court case in which retrospective effect is discretioned for proper legal conduct. See, this is stifling innovation. AMD had these aims prior to Trump's election.

AMD announced the " 25 x 20 Energy Efficiency Initiative (25 x 20 initiative) " with its ambitious goal of "to 20 times more power efficiency in the six years to 2025" by semiconductor giant AMD. It was revealed that the interim report was issued by Mark · Paper Master CTO and continued to produce results to the extent that it was too good.
2025 goals had been set between AMD and China, through sporadic mutualism.

If other parties have any objection, they have been too late onto the scene. Retrospective laws don't break contracts.
 
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