Bad to worse for chip stocks as Huawei's suppliers fall again


(Bloomberg) – A bad month is worsening for US and European semiconductor stocks.

While the industry was one of the biggest victims of escalating trade tensions between the United States and China, reports Monday that some suppliers of Huawei Technologies Co. would have interrupted their deliveries to Chinese company have sent heavy trucks, Intel Corp. and Qualcomm Inc., which was lowered in US pre-market trading. In Europe, the Stoxx 600 technology index lost up to 2.5%. AMS was down 13.4%, but fell slightly after saying it had not suspended its shipments to Chinese society.

Infineon Technologies AG, which reportedly halted deliveries to Huawei, fell 6.1%. The company said by email that it could not confirm the report of the Nikkei Asian Review and that "to date, the vast majority of the products that Infineon delivers to Huawei are not subject to the restrictions imposed by US law. in the field of export control.

Today's moves add up to declines at the end of last week after the White House put Huawei on a blacklist and threatened to stop buying US goods. Until Friday, the Philadelphia Semiconductor index is down 9.9% this month, which is a dramatic reversal from a 12% rise in April. Among other US technology stocks, Micron Technology Inc., Skyworks Solutions Inc., Qorvo Inc., Broadcom Inc. and Analog Devices Inc. are all expected to decline. Last week, Morgan Stanley stressed that the five companies could see their sales threatened by the ban Huawei.

Analysts Morgan Stanley, including Joseph Moore and Craig Hettenbach, wrote on Monday that investors in semiconductors should reduce their positions, with a prolonged re-escalation of US-Chinese trade tensions not yet discounted by the recent market declines.

"We continue to see very high stocks in semiconductor and channel balances, weak final demand in almost all semiconductor markets, a single-generation overabundance of memory, and undercapital capital expenditures." Consequently. to feel comfortable with all this. "

(Updates with detailed Infineon commentary, adding stocks to the fourth paragraph, stock updates.)

To contact the reporter about this story: Beth Mellor in London at [email protected]

To contact the editors in charge of this story: Celeste Perri at [email protected], Steven Fromm

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