Broadcom Inc sent a shockwave through the global chipmaking industry on Friday with its forecast that U.S.-China trade tensions and the ban on doing business with Huawei Technologies would knock $2 billion off the company’s sales this year.
Huawei accounted for about $900 million, or 4%, of the company’s overall sales last year. Broadcom, however, also said the forecast cut “extends beyond one particular customer.”
LONDON/BENGALURU (Reuters) – Broadcom Inc sent a shockwave through the global chipmaking industry on Friday with its forecast that U.S.-China trade tensions and the ban on doing business with Huawei Technologies would knock $2 billion off the company’s sales this year.
The Philadelphia chip index was down nearly 3% with 29 of its 30 components trading lower. Shares of other Huawei suppliers like Analog Devices Inc, Skyworks Solutions and Qorvo Inc also fell.
“We’ll see a very sharp impact simply because (there are) no purchases allowed and there’s no obvious substitution in place,” Chief Executive Officer Hock Tan said on a post-earnings call with analysts on the Huawei ban.
Huawei accounted for about $900 million, or 4%, of the company’s overall sales last year. Broadcom, however, also said the forecast cut “extends beyond one particular customer.”
Reuters: Broadcom’s $2 billion warning rattles global chip sector
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