AMD’s Strategic Moves: Securing China Deal and Shifting Production

Advanced Micro Devices (AMD) is reportedly in negotiations for a substantial order from China, a development that could significantly impact its position in the competitive artificial intelligence hardware sector. According to media reports, e-commerce conglomerate Alibaba is evaluating the purchase of between 40,000 and 50,000 MI308 AI accelerators. This potential agreement coincides with a recent relaxation of U.S. export controls, which now permit the sale of certain advanced chips to China, albeit with an added tariff.

In a parallel strategic development, AMD is undertaking a fundamental realignment of its manufacturing supply chain. The company is engaged in talks with Samsung to utilize 2-nanometer production lines at a facility in Taylor, Texas. This move is driven by Taiwanese export regulations that prohibit TSMC, AMD's primary manufacturing partner, from producing its most advanced 2nm chips outside of Taiwan.

Collaborating with Samsung is viewed as a method for AMD to diversify its supply chain and mitigate geopolitical risks. Establishing manufacturing capacity within the United States could offer a strategic advantage, particularly following a setback for competitor Intel, which recently saw Nvidia halt testing for Intel's 18A process technology.

Competing for a Lucrative Market

The race to capture market share in China is intensifying. While rival Nvidia aims to begin shipments of its H200 chips ahead of the Chinese New Year in February 2026, a confirmed deal with Alibaba would provide AMD with a crucial entry point into this restricted yet profitable market. Analysts estimate that an order of this magnitude would contribute noticeably to AMD's revenue.

Should investors sell immediately? Or is it worth buying AMD?

Currently, AMD trails Nvidia in the market for AI accelerators. In response, the company has bolstered partnerships with major hyperscalers, including OpenAI, Meta, and Microsoft Azure, which are adopting its MI450 platform. AMD's Data Center segment posted a solid year-over-year growth of 22% in the third quarter of 2025, though this performance is viewed against the backdrop of the sector's explosive overall dynamics.

Mixed Signals from the Market

Institutional investor interest appears strong. Farther Finance Advisors increased its stake in AMD by 115.6% during the third quarter. However, CEO Lisa Su sold 125,000 shares in mid-December, a transaction valued at approximately $26.9 million. Such sales are frequently pre-planned but nonetheless present a contrasting signal to the market.

Approximately 80% of covering analysts maintain a buy recommendation on AMD shares, with an average price target of $277.06. Whether the current price level near $215 serves as a foundation for upward movement is seen as largely dependent on the confirmation of the Alibaba order and the finalization of the Samsung manufacturing agreement. Markets will next have an opportunity to react on December 26.