Aug 1 Reuters Advanced Micro Devices on Tuesday forecast a strong finish to the year, driven by the planned launch of artificialintelligence chips that could compete with Nvidia semiconductors.

AMD shares rose about 3 in afterhours trading.

CEO Lisa Su said AMD is set to ramp up production of its flagship MI300 artificialintelligence chips in the fourth quarter. The accelerator chips, which are in short supply, are designed to compete against the advanced H100 chips already sold by Nvidia.

Su said customer interest in the MI300 series chips is very high and AMD expanded its work with toptier cloud providers, large enterprises and numerous leading AI companies during the third quarter.

Investors are betting that MI300 chips, due for release later this year, will challenge Nvidia in the surging market for advanced AI chips.

MI300s exceed the performance limits for sale to China under export controls issued in October, and unlike Nvidia and Intel, AMD has yet to create special chips for the lucrative Chinese market.

Nvidia modified its H100 chips to comply with U.S. Commerce Department restrictions on advanced AI semiconductor sales to China. AMD is mulling a similar strategy with its MI300 and older MI250 chips, Su said on a conference call with analysts on Tuesday.

Our plan is to, of course, be fully compliant with U.S. export controls. But we do believe there39;s an opportunity to develop products for our customer set in China that is looking for AI solutions, and…