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.
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.