China is 25% of AMD’s business

$AMD(AMD)$ China is 25% of AMD’s business. But Dr Lisa Su must call China’s bluff. The merger must happen in 1Q22 as per the merger agreement.

In the end Dr Lisa Su cannot let China dictate AMD response to US regulations. If the US imposes restrictions on sales to China, then China’s supply will be restricted. No SAMR request for guarantee of Chip supply can change that. It is beyond AMD’s control.

AMD must further provide supply on an equal basis. It would be bad business for AMD to start playing “favorite countries”. Customers must feel they are all getting equal access and that AMD is doing everything it can to provide that access, equally.

Which ultimately leads to Dr Lisa Su needing to call China’s bluff. If China will not approve the merger then AMD Xilinx must regretfully continue on without China. True, China might ban AMD. But if China is so concerned about supply of AMD product then in this case China has no one to blame but China.

Simply telling China this is sufficient for SAMR approval. China does not wish to be seen as marginalized by a US company as if China does not matter. This would be a huge offense and loss of face for China. We will never hear the full or real story in these negotiations.

But Dr Lisa Su will not back away from this problem. Her mantra is to run to every problem, own it and solve it. And so she will.