21 May

Trump’s Huawei Ban Pulls Down US Chip Stocks

WRITTEN BY Sneha Nahata

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.

Latest articles

TJX Companies (TJX) reported better-than-expected earnings results for the third quarter of fiscal 2020, which ended on November 2.

Despite Canada's legalization of cannabis a year ago, a StatCan survey found that 42% of Canadians have obtained their cannabis from illegal sources.

On November 11, the NHS (National Health Service) approved two cannabis-based medicines, Epidyolex and Sativex, for use in the United Kingdom.

Roku (ROKU) stock tanked more than 5% on Tuesday during market hours. The company said it will issue nearly 1 million common shares today.

The Hill reported yesterday that on November 20, the House Judiciary Committee plans to mark up legislation that federally decriminalizes marijuana.

Spotify (SPOT) stock fell during Tuesday’s trading session, as investors fear the entry of Chinese rival TikTok, putting Spotify’s subscribers at risk.