Broadcom to Take $2Bn Hit From Huawei Ban
14 Juni 2019 - 12:42PM
Dow Jones News
By WSJ City
Broadcom said it would make $2bn less in annual sales than
expected following the US ban on exports to Chinese telecom giant
Huawei, becoming one of the first big chip makers to quantify the
financial impact of the Trump administration's escalating trade
dispute.
KEY FACTS
--- Few chip companies have reported results since the ban,
leaving economic effects difficult to measure.
--- Broadcom's lower full-year revenue forecast ($22.5bn, down
from $24.5bn) shows the impact of the ban.
--- It also missed revenue Q2 targets, citing slowing sales in
its wireless business as well as the trade spat.
--- The company reaped $900m of revenue from Huawei in its
previous fiscal year.
--- Some smaller chip companies have already warned that the
Huawei ban will ding their revenue.
--- Qorvo and Lumentum both reduced their quarterly revenue
guidance last month by about $50m.
--- Analog Devices, a larger firm, gave guidance for Q3 that
came in around $100m below analysts expectations.
Why This Matters
Broadcom's gloomier guidance could spread across the
semiconductor industry as other big players, including Qualcomm and
Intel, begin to reconsider their outlooks in light of the Huawei
ban and a broader anxiety about the geopolitical future, analysts
say. Huawei is one of the US chip industry's most lucrative
customers.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
June 14, 2019 06:27 ET (10:27 GMT)
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