REUTERS
"U.S. chip bans not meant to hobble China's growth, Blinken says"
By Stephen Nellis
April 26, 2024
April 26 (Reuters) - U.S. export controls on sending advanced computing chips to China are not meant to hold back China's economy or technological development, Secretary of State Antony Blinken said during an interview with National Public Radio on Friday.
Since 2022, U.S. officials have imposed sweeping controls on which computing chips can be exported to China, cutting off some sales from Nvidia, Advanced Micro Devices and Intel, among others.
Those controls followed earlier bans on shipping chips to Huawei Technologies.
But U.S. officials have granted at least two U.S. companies - Intel and Qualcomm - licenses to keep shipping chips to Huawei, which is using an Intel chip to power a new laptop model.
Two Republican lawmakers earlier this week criticized the exemption for Intel, but in the interview with NPR, Blinken highlighted the device as a sign the U.S. was not trying to hobble China.
"I saw that Huawei just put out a new laptop that it boasted was AI capable, that uses an Intel chip," Blinken told NPR host Steve Inskeep while visiting Beijing.
"I think it demonstrates that what we're focused on is only the most sensitive technology that could pose a threat to our security."
"We're not focused on cutting off trade, or for that matter containing or holding back China."
Intel and Qualcomm's licenses to sell to Huawei were granted during President Donald Trump's administration and have remained in place under President Joe Biden.
Those companies' direct competitors, AMD and MediaTek, have not received similar exemptions, and neither the Trump nor Biden administrations have explained why.
Reporting by Stephen Nellis in San Francisco; Editing by Sandra Maler
https://www.reuters.com/technology/us-c ... 024-04-26/
CHIPS
Re: CHIPS
REUTERS
"AMD AI chip revenue forecast fails to impress, shares dive 7%"
By Arsheeya Bajwa and Max A. Cherney
April 30, 2024
April 30 (Reuters) - Advanced Micro Devices issued a forecast on Tuesday for its artificial intelligence chips that failed to impress investors, and its shares slumped about 7% in extended trading.
In the earnings call, Chief Executive Officer Lisa Su said AMD now expected AI chip sales of roughly $4 billion for 2024, an increase of $500 million from its prior estimate for the year.
The increase of a half billion dollars was not enough to meet Wall Street's lofty expectations for AI chips.
Nvidia has consistently crushed investor expectations because of soaring AI chip sales.
Enterprises rushing to adopt generative AI have prioritized spending on AI server chips, hitting demand for traditional server semiconductors, which constitute a large portion of AMD's revenue.
These processors cannot effectively handle the complex tasks associated with AI.
While some of AMD's central processors (CPUs) are used in conjunction with AI chips, the ratio is skewed in favor of more advanced AI processors versus CPUs.
AMD trails front-runner Nvidia, which commands a share of about 80% in the booming market for artificial intelligence server semiconductors.
On an adjusted basis, AMD forecast gross margin of about 53% for the second quarter, just beating the estimate of 52.9%.
Revenue at its data center business jumped 80% to $2.3 billion.
Analysts had expected revenue growth from AMD's MI300 series of AI processors to offset weakness in the traditional server market.
Uncertain demand from the gaming market has further hurt AMD.
Personal computing and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026, according to research firm Newzoo.
Gaming revenue fell 48% to $922 million.
The company had forecast significant double-digit percentage declines in this segment as revenue from the chips it designs for gaming consoles such as Microsoft's Xbox and the Sony PlayStation 5 has already hit its peak.
This year, 2024, marks the fifth year of the gaming cycle, CFO Jean Xu had said in January.
AMD's videogame console revenue peaks after roughly four years.
Revenue from the embedded segment fell 46% to $846 million compared with the year-ago quarter.
The company had said in January demand for the segment will remain soft through the first half of the year.
Ongoing inventory corrections have hit revenue from this segment as clients clear out a build-up of chips.
The company forecast revenue of about $5.70 billion, plus or minus $300 million, for the second quarter, in line with analysts' average estimate, according to LSEG data.
AMD reported revenue of $5.47 billion for the first quarter, compared to analysts' average estimate of $5.46 billion.
AMD reported per-share earnings of 62 cents, adjusted for stock-based compensation, among other items.
Analysts expected adjusted earnings of 61 cents a share.
Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Pooja Desai and David Gregorio
https://www.reuters.com/technology/chip ... 024-04-30/
"AMD AI chip revenue forecast fails to impress, shares dive 7%"
By Arsheeya Bajwa and Max A. Cherney
April 30, 2024
April 30 (Reuters) - Advanced Micro Devices issued a forecast on Tuesday for its artificial intelligence chips that failed to impress investors, and its shares slumped about 7% in extended trading.
In the earnings call, Chief Executive Officer Lisa Su said AMD now expected AI chip sales of roughly $4 billion for 2024, an increase of $500 million from its prior estimate for the year.
The increase of a half billion dollars was not enough to meet Wall Street's lofty expectations for AI chips.
Nvidia has consistently crushed investor expectations because of soaring AI chip sales.
Enterprises rushing to adopt generative AI have prioritized spending on AI server chips, hitting demand for traditional server semiconductors, which constitute a large portion of AMD's revenue.
These processors cannot effectively handle the complex tasks associated with AI.
While some of AMD's central processors (CPUs) are used in conjunction with AI chips, the ratio is skewed in favor of more advanced AI processors versus CPUs.
AMD trails front-runner Nvidia, which commands a share of about 80% in the booming market for artificial intelligence server semiconductors.
On an adjusted basis, AMD forecast gross margin of about 53% for the second quarter, just beating the estimate of 52.9%.
Revenue at its data center business jumped 80% to $2.3 billion.
Analysts had expected revenue growth from AMD's MI300 series of AI processors to offset weakness in the traditional server market.
Uncertain demand from the gaming market has further hurt AMD.
Personal computing and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026, according to research firm Newzoo.
Gaming revenue fell 48% to $922 million.
The company had forecast significant double-digit percentage declines in this segment as revenue from the chips it designs for gaming consoles such as Microsoft's Xbox and the Sony PlayStation 5 has already hit its peak.
This year, 2024, marks the fifth year of the gaming cycle, CFO Jean Xu had said in January.
AMD's videogame console revenue peaks after roughly four years.
Revenue from the embedded segment fell 46% to $846 million compared with the year-ago quarter.
The company had said in January demand for the segment will remain soft through the first half of the year.
Ongoing inventory corrections have hit revenue from this segment as clients clear out a build-up of chips.
The company forecast revenue of about $5.70 billion, plus or minus $300 million, for the second quarter, in line with analysts' average estimate, according to LSEG data.
AMD reported revenue of $5.47 billion for the first quarter, compared to analysts' average estimate of $5.46 billion.
AMD reported per-share earnings of 62 cents, adjusted for stock-based compensation, among other items.
Analysts expected adjusted earnings of 61 cents a share.
Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Pooja Desai and David Gregorio
https://www.reuters.com/technology/chip ... 024-04-30/
Re: CHIPS
REUTERS
"Chipmaker Wolfspeed forecasts quarterly revenue below estimates as EV sales growth slows"
By Reuters
May 1, 2024
May 1 (Reuters) - Chipmaker Wolfspeed forecast current-quarter revenue below estimates on Wednesday as automakers grapple with high inventory levels due to slower-than-expected EV sales growth.
Shares of the company, which counts General Motors and Mercedes-Benz among its customers, fell about 4% in extended trading.
Wolfspeed makes chips out of silicon carbide, a more energy-efficient material than standard silicon for tasks such as transmitting power from an electric car's batteries to its motors.
EV demand has been growing at a slower-than-expected pace, attributed to high interest rates that lead to chip inventory build-ups at the automakers' factories.
The company said it expects fourth-quarter revenue between $185 million and $215 million, compared with analysts' estimate of $225.8 million, according to LSEG data.
"While the industrial and energy end markets pose short-term headwinds to our results, we firmly believe in the strength of our long-term prospects as the electrification of all things continues across a broad set of applications," CEO Gregg Lowe said in a statement.
Tesla reported a drop in quarterly deliveries in the first quarter of 2024, as it expects "notably slower" growth this year since automakers have pivoted to produce and sell more gasoline-electric hybrid vehicles.
Wolfspeed reported March-quarter revenue of $200.7 million, compared with estimates of $201.1 million, while net loss widened to $1.18 per share from 80 cents per share a year earlier.
Reporting by Akash Sriram in Bengaluru; Editing by Alan Barona
https://www.reuters.com/technology/chip ... 024-05-01/
"Chipmaker Wolfspeed forecasts quarterly revenue below estimates as EV sales growth slows"
By Reuters
May 1, 2024
May 1 (Reuters) - Chipmaker Wolfspeed forecast current-quarter revenue below estimates on Wednesday as automakers grapple with high inventory levels due to slower-than-expected EV sales growth.
Shares of the company, which counts General Motors and Mercedes-Benz among its customers, fell about 4% in extended trading.
Wolfspeed makes chips out of silicon carbide, a more energy-efficient material than standard silicon for tasks such as transmitting power from an electric car's batteries to its motors.
EV demand has been growing at a slower-than-expected pace, attributed to high interest rates that lead to chip inventory build-ups at the automakers' factories.
The company said it expects fourth-quarter revenue between $185 million and $215 million, compared with analysts' estimate of $225.8 million, according to LSEG data.
"While the industrial and energy end markets pose short-term headwinds to our results, we firmly believe in the strength of our long-term prospects as the electrification of all things continues across a broad set of applications," CEO Gregg Lowe said in a statement.
Tesla reported a drop in quarterly deliveries in the first quarter of 2024, as it expects "notably slower" growth this year since automakers have pivoted to produce and sell more gasoline-electric hybrid vehicles.
Wolfspeed reported March-quarter revenue of $200.7 million, compared with estimates of $201.1 million, while net loss widened to $1.18 per share from 80 cents per share a year earlier.
Reporting by Akash Sriram in Bengaluru; Editing by Alan Barona
https://www.reuters.com/technology/chip ... 024-05-01/
Re: CHIPS
REUTERS
"AMD, Super Micro tumble as earnings fall short"
By Harshita Mary Varghese
May 1, 2024
May 1 (Reuters) - Advanced Micro Devices and Super Micro Computer led a selloff in chip stocks on Wednesday after their earnings disappointed investors who had piled into the sector on optimism about AI.
AMD slumped nearly 10% and was on course to lose more than $21 billion in market value.
Its forecast of $4 billion in AI chip sales for 2024 fell short of the high expectations of Wall Street investors following larger rival Nvidia's massive forecasts over the past year.
Super Micro Computer, whose 150% stock jump this year has outpaced even gains in Nvidia, dropped more than 16% after its third-quarter revenue missed estimates amid questions over the profitability of a new line of servers.
The Philadelphia Semiconductor index tumbled 3.5%.
Nvidia fell 5.7%, while Micron Technology lost 2.9% and AI-linked chip firm Marvell Technology slid 3.6%.
"As the market is shifting more towards risk-off over the last couple of days, it's not shocking that unless these companies are beating earnings by a mile that some of the hot air is coming out of them for now," said Russell Hackmann, president of Hackmann Wealth Partners.
Executives of both AMD and Super Micro Computer said supply constraints were hampering their efforts to capitalize on demand for equipment powering the boom in generative AI.
"Stepping back, AMD has several customers who are all trying to ramp MI300 (AI chip) very quickly."
"This is stressing the supply chain to a certain extent," said analysts at TD Cowen.
"However, from a demand perspective, customer engagement is in fact increasing, not only for MI300X but its successor products."
Several analysts were still positive on AMD, saying easing supply chain constraints should allow the company to increase its share of the AI chip market and potentially reap billions of dollars in revenue.
At least 10 analysts lowered their price target on AMD, while eight raised their view, according to LSEG data.
Super Micro saw three price target increases and two cuts.
Shares of Apple suppliers Qualcomm and Qorvo fell 0.7% and 3.4%, respectively, ahead of their quarterly reports on Wednesday after the bell.
Reporting by Harshita Mary Varghese in Bengaluru; Additional reporting by Shashwat Chauhan; Editing by Krishna Chandra Eluri and Shounak Dasgupta
https://www.reuters.com/technology/amd- ... 024-05-01/
"AMD, Super Micro tumble as earnings fall short"
By Harshita Mary Varghese
May 1, 2024
May 1 (Reuters) - Advanced Micro Devices and Super Micro Computer led a selloff in chip stocks on Wednesday after their earnings disappointed investors who had piled into the sector on optimism about AI.
AMD slumped nearly 10% and was on course to lose more than $21 billion in market value.
Its forecast of $4 billion in AI chip sales for 2024 fell short of the high expectations of Wall Street investors following larger rival Nvidia's massive forecasts over the past year.
Super Micro Computer, whose 150% stock jump this year has outpaced even gains in Nvidia, dropped more than 16% after its third-quarter revenue missed estimates amid questions over the profitability of a new line of servers.
The Philadelphia Semiconductor index tumbled 3.5%.
Nvidia fell 5.7%, while Micron Technology lost 2.9% and AI-linked chip firm Marvell Technology slid 3.6%.
"As the market is shifting more towards risk-off over the last couple of days, it's not shocking that unless these companies are beating earnings by a mile that some of the hot air is coming out of them for now," said Russell Hackmann, president of Hackmann Wealth Partners.
Executives of both AMD and Super Micro Computer said supply constraints were hampering their efforts to capitalize on demand for equipment powering the boom in generative AI.
"Stepping back, AMD has several customers who are all trying to ramp MI300 (AI chip) very quickly."
"This is stressing the supply chain to a certain extent," said analysts at TD Cowen.
"However, from a demand perspective, customer engagement is in fact increasing, not only for MI300X but its successor products."
Several analysts were still positive on AMD, saying easing supply chain constraints should allow the company to increase its share of the AI chip market and potentially reap billions of dollars in revenue.
At least 10 analysts lowered their price target on AMD, while eight raised their view, according to LSEG data.
Super Micro saw three price target increases and two cuts.
Shares of Apple suppliers Qualcomm and Qorvo fell 0.7% and 3.4%, respectively, ahead of their quarterly reports on Wednesday after the bell.
Reporting by Harshita Mary Varghese in Bengaluru; Additional reporting by Shashwat Chauhan; Editing by Krishna Chandra Eluri and Shounak Dasgupta
https://www.reuters.com/technology/amd- ... 024-05-01/
Re: CHIPS
REUTERS
"Intel, Qualcomm say exports to China blocked as Beijing objects"
By David Shepardson and Stephen Nellis
May 8, 2024
May 8 (Reuters) - Intel said on Wednesday its sales would take a hit after the U.S. revoked some of the chipmaker's export licenses for a customer in China, in a move Beijing complained was going too far in the name of national security.
Intel did not disclose the name of the Chinese customer that had licenses canceled in its filing with the Securities and Exchange Commission, but Reuters had reported on Tuesday the U.S. has revoked licenses that allowed companies, including Intel and Qualcomm, to ship chips used for laptops and handsets to sanctioned Chinese telecoms equipment maker Huawei Technologies.
The release of Huawei's first AI-enabled laptop in April, the MateBook X Pro powered by Intel's new Core Ultra 9 processor, drew fire from Republican lawmakers, who said it suggests that the Commerce Department had given the green light to Intel to sell the chip to Huawei.
Intel's shares were down 2.9% at $29.80 on Wednesday afternoon after the company said it expects revenue for the second quarter to remain in the range of $12.5 billion to $13.5 billion, but below the midpoint.
Intel shares have lost nearly 38% so far this year.
Qualcomm also said on Wednesday that one of its export licenses for Huawei had been revoked; its shares were flat.
"Huawei is a threat," Commerce Secretary Gina Raimondo told Reuters after a congressional hearing on Wednesday, adding that the move was not a change in policy.
"Maybe we have an increased focus on AI."
"And so when we learn more about AI capabilities, that's when we have to take action," she said.
"So if a chip that we previously licensed for example, now we discover had AI capabilities, we're going to revoke the license."
The Chinese foreign ministry, which has criticized every effort by the U.S. to crack down on tech exports to China, said in a statement it opposed the move and that the U.S. was "over-stretching the concept of national security and abusing export controls to suppress Chinese companies without justification."
The United States placed Huawei on a trade restriction list in 2019 amid fears it could spy on Americans, part of a broader effort to handicap China's ability to bolster its military.
Joining the list means the company's suppliers have to seek a special, difficult-to-obtain license before shipping.
The new restrictions on Huawei are President Joe Biden's latest effort to deny China access to the United States' most sensitive and sophisticated “crown jewel” technology in a bid to thwart Beijing.
Biden has used export bans, diplomacy with like-minded democracies and other means to stifle China’s swift technological advances in areas from quantum computing to robotics, and even explained the strategy to Chinese leader Xi Jinping as a new normal in an era of competition between two nations with different political systems.
Reporting by Aditya Soni in Bengaluru, Stephen Nellis in San Francisco and Trevor Hunnicutt in Washington; Writing by Chris Sanders; Editing by Chizu Nomiyama, Nick Zieminski and Matthew Lewis
https://www.reuters.com/technology/inte ... 024-05-08/
"Intel, Qualcomm say exports to China blocked as Beijing objects"
By David Shepardson and Stephen Nellis
May 8, 2024
May 8 (Reuters) - Intel said on Wednesday its sales would take a hit after the U.S. revoked some of the chipmaker's export licenses for a customer in China, in a move Beijing complained was going too far in the name of national security.
Intel did not disclose the name of the Chinese customer that had licenses canceled in its filing with the Securities and Exchange Commission, but Reuters had reported on Tuesday the U.S. has revoked licenses that allowed companies, including Intel and Qualcomm, to ship chips used for laptops and handsets to sanctioned Chinese telecoms equipment maker Huawei Technologies.
The release of Huawei's first AI-enabled laptop in April, the MateBook X Pro powered by Intel's new Core Ultra 9 processor, drew fire from Republican lawmakers, who said it suggests that the Commerce Department had given the green light to Intel to sell the chip to Huawei.
Intel's shares were down 2.9% at $29.80 on Wednesday afternoon after the company said it expects revenue for the second quarter to remain in the range of $12.5 billion to $13.5 billion, but below the midpoint.
Intel shares have lost nearly 38% so far this year.
Qualcomm also said on Wednesday that one of its export licenses for Huawei had been revoked; its shares were flat.
"Huawei is a threat," Commerce Secretary Gina Raimondo told Reuters after a congressional hearing on Wednesday, adding that the move was not a change in policy.
"Maybe we have an increased focus on AI."
"And so when we learn more about AI capabilities, that's when we have to take action," she said.
"So if a chip that we previously licensed for example, now we discover had AI capabilities, we're going to revoke the license."
The Chinese foreign ministry, which has criticized every effort by the U.S. to crack down on tech exports to China, said in a statement it opposed the move and that the U.S. was "over-stretching the concept of national security and abusing export controls to suppress Chinese companies without justification."
The United States placed Huawei on a trade restriction list in 2019 amid fears it could spy on Americans, part of a broader effort to handicap China's ability to bolster its military.
Joining the list means the company's suppliers have to seek a special, difficult-to-obtain license before shipping.
The new restrictions on Huawei are President Joe Biden's latest effort to deny China access to the United States' most sensitive and sophisticated “crown jewel” technology in a bid to thwart Beijing.
Biden has used export bans, diplomacy with like-minded democracies and other means to stifle China’s swift technological advances in areas from quantum computing to robotics, and even explained the strategy to Chinese leader Xi Jinping as a new normal in an era of competition between two nations with different political systems.
Reporting by Aditya Soni in Bengaluru, Stephen Nellis in San Francisco and Trevor Hunnicutt in Washington; Writing by Chris Sanders; Editing by Chizu Nomiyama, Nick Zieminski and Matthew Lewis
https://www.reuters.com/technology/inte ... 024-05-08/
Re: CHIPS
"Revenues and profit dropped at GlobalFoundries in first quarter - Awards of $2.1 billion in direct government support through CHIPS Act and New York state will help the chipmaker meet demands"
By Larry Rulison, Albany, New York Times Union
May 8, 2024
MALTA — Both profit and revenue fell at GlobalFoundries during the first quarter of 2024, but that was expected.
The good news is that global demand for computer chips is bouncing back. And GlobalFoundries has some big checks coming in the mail.
That means brighter days are ahead after a year that included fewer chip orders from customers and layoffs to trim expenses.
On Tuesday, GlobalFoundries reported first-quarter revenue of $1.55 billion, down from $1.85 billion during the same period last year.
That was expected due to the global drop in chip demand that hit the industry last year and extended into 2024.
Net income, or earnings, also dropped from $278 million to $134 million during the quarter.
However, CEO Thomas Caulfield noted that the first quarter 2024 results actually “exceeded” the high end of the company’s expectations that had been conveyed to analysts and stockholders in February when it announced its year-end and fourth quarter 2023 results.
There was other promising news as demand for chips is increasing just as the federal government has started to announce much-expected financial aid to chip companies to build new factories across the U.S.
It's all funded by the $52 billion CHIPS and Science Act authored by U.S. Senate Majority Leader Charles Schumer of New York.
In February, the U.S. Commerce Department announced it had reached a preliminary agreement to provide GlobalFoundries with a $1.5 billion grant, as well as billions more in loans, to expand its manufacturing operations at its headquarters in Saratoga County and its other U.S. factory in Vermont.
The state of New York is also offering the company $600 million in tax breaks.
The funding and financial aid will help GlobalFoundries more quickly ramp up production as the U.S. seeks to combat China in what has become a global race to dominate the chip industry.
“As pockets of the semiconductor industry begin to emerge from the inventory correction, our teams are driving foundry innovation and differentiation for our customers across their essential end-markets,” Caulfield said in a statement.
“We are delighted with the awards from both the U.S. Department of Commerce and New York state to expand our manufacturing capability in the United States, which will complement our unique global capacity offering.”
https://www.timesunion.com/business/art ... 0headlines
By Larry Rulison, Albany, New York Times Union
May 8, 2024
MALTA — Both profit and revenue fell at GlobalFoundries during the first quarter of 2024, but that was expected.
The good news is that global demand for computer chips is bouncing back. And GlobalFoundries has some big checks coming in the mail.
That means brighter days are ahead after a year that included fewer chip orders from customers and layoffs to trim expenses.
On Tuesday, GlobalFoundries reported first-quarter revenue of $1.55 billion, down from $1.85 billion during the same period last year.
That was expected due to the global drop in chip demand that hit the industry last year and extended into 2024.
Net income, or earnings, also dropped from $278 million to $134 million during the quarter.
However, CEO Thomas Caulfield noted that the first quarter 2024 results actually “exceeded” the high end of the company’s expectations that had been conveyed to analysts and stockholders in February when it announced its year-end and fourth quarter 2023 results.
There was other promising news as demand for chips is increasing just as the federal government has started to announce much-expected financial aid to chip companies to build new factories across the U.S.
It's all funded by the $52 billion CHIPS and Science Act authored by U.S. Senate Majority Leader Charles Schumer of New York.
In February, the U.S. Commerce Department announced it had reached a preliminary agreement to provide GlobalFoundries with a $1.5 billion grant, as well as billions more in loans, to expand its manufacturing operations at its headquarters in Saratoga County and its other U.S. factory in Vermont.
The state of New York is also offering the company $600 million in tax breaks.
The funding and financial aid will help GlobalFoundries more quickly ramp up production as the U.S. seeks to combat China in what has become a global race to dominate the chip industry.
“As pockets of the semiconductor industry begin to emerge from the inventory correction, our teams are driving foundry innovation and differentiation for our customers across their essential end-markets,” Caulfield said in a statement.
“We are delighted with the awards from both the U.S. Department of Commerce and New York state to expand our manufacturing capability in the United States, which will complement our unique global capacity offering.”
https://www.timesunion.com/business/art ... 0headlines