(Reuters) – Intel and Advanced Micro Devices could lose billions of dollars in revenue if China restricts the use of its chips and servers in government computers, multiple Wall Street analysts say. analysts said on Monday.
The Financial Times reported over the weekend that China introduced guidelines to phase out U.S. chips from companies, hoping to eliminate Microsoft Windows and foreign database software in favor of domestic options. Ta.
The Chinese government is trying to foster its domestic semiconductor industry and reduce dependence on foreign companies as it grapples with U.S. export restrictions on technology, including cutting-edge chips.
China is Intel's largest market, accounting for 27% of its revenue in 2023, while AMD derives about 15% of its revenue from the country, so the move could be a big hit to the chip company's bottom line. There is sex.
Microsoft does not break out its revenue from China.
“A complete halt to the Chinese government's purchases of Intel and AMD CPUs could have a low-single-digit impact on sales,” Bernstein analyst Stacey Rasgon said. is predicting a hit of up to $1.5 billion, and AMD is predicting a hit of hundreds of millions of dollars.
But he said Intel could face an even bigger hit to profits, in the mid-single digits to low double digits, “given the increased exposure and the vagaries of the deteriorating cost structure.”
Intel declined to comment, while AMD and Microsoft did not respond to Reuters' requests for comment. In afternoon trading, Intel stock fell 1.6% and Microsoft stock fell 1%, but AMD reversed its early decline and rose slightly.
China's Ministry of Industry issued a statement in late December containing three separate lists of central processing units, operating systems and centralized databases that will be deemed “secure and reliable” for three years from the date of the announcement, all of which are Chinese companies. A Reuters investigation revealed that it was.
Apple has also been caught up in rising Sino-American tensions, with Bloomberg News reporting in December that Chinese agencies and state-owned companies had asked employees not to bring iPhones to work.
(Reporting by Aditya Soni in Bengaluru; Editing by Arun Koyur)
