Trump’s Huawei Ban Pulls Down US Chip Stocks

Huawei ban

Last week, Donald Trump blacklisted Chinese telecom giant Huawei Technologies amid rising US-China trade tensions, restricting US companies’ transfer or supply of any components, service, or technical support to the Chinese company. According to Trump, Huawei is a potential threat to the country as it has been allegedly involved with many issues, including stealing trade secrets from T-Mobile USA and defrauding Iranian banks.

Trump’s Huawei Ban Pulls Down US Chip Stocks

Chip stocks fall

With Huawei’s ban, many US chip companies that supply Huawei also suffered as they derive a large part of their revenue from the telecom company. The PHLX Semiconductor Index fell ~4.02% yesterday.

Chip makers Intel (INTC), Qualcomm (QCOM), Xilinx (XLNX), and Broadcom (AVGO) have reportedly stopped supplying Huawei until further notice. Broadcom stock fell ~5.9% yesterday, and Qualcomm, Xilinx, and Intel fell ~6%, ~3.6%, and ~2.9%, respectively. Memory chip makers Micron Technology (MU) and Western Digital (WDC) fell ~4% and 6%, respectively, while semiconductor stocks Marvell Technology (MRVL), Advanced Micro Devices (AMD) and NVIDIA (NVDA) fell ~3.9%, ~2.98%, and ~3.05%.

NeoPhotonics (NPTN), another US supplier that depends on Huawei for revenue (it contributes ~47% of its total revenue), has fallen 32% since Huawei was blacklisted. Qorvo (QRVO) and Skyworks Solutions (SWKS), which earn ~10% of their revenue from Huawei, fell ~4.16% and ~2.9%, respectively, yesterday.