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Broadcom CEO Hock Tan pays the price for misjudging President Donald Trump's determination to "put the Chinese on their knees," CNBC's Jim Cramer said on Friday.
Trump thinks he "must sacrifice Broadcom on the altar of Huawei" to humiliate China in trade negotiations, Cramer said. Last year, Broadcom received about $ 900 million in revenue from Chinese company Huawei, a leading manufacturer of smartphones and mobile network devices.
"President considers Huawei as the Achilles heel" of Chinese leader Xi Jinping. The calculation of Huawei's blacklist for doing business with US companies is that China would never let one of its tech jewels fail, the host of "Mad Money" speculated.
Tan may feel uncomfortable with Trump, Cramer said, noting that the CEO of Broadcom had gone to the White House in 2017 and had joined the president to announce that he relocated the Singapore-based company to the United States.
Last year, the Trump administration blocked Broadcom's $ 117 billion bid to buy Qualcomm, based in San Diego, for national security reasons.
"What a death kiss if you're a good friend of the president," said Cramer in "Squawk on the Street".
"Broadcom is a remarkably good company and it will be hurt" in the crossfire between the two largest economic superpowers in the world, he said.
Broadcom shares fell sharply at Friday's opening on Wall Street after the semiconductor maker announced last Thursday a lower-than-expected business figure. He also announced a reduction in revenue forecasts for 2019, in anticipation of a slowdown in demand resulting from conflicts between Washington and Beijing. This is "motivated by persistent geopolitical uncertainties," Tan said in a statement.
The company also sees the "effects of export restrictions on one of our biggest customers," added Tan, referring to the Trump administration last month, preventing Huawei from buying equipment from US companies without special authorization. However, the Commerce Department has put 90 days on hold.
The White House has accused Huawei of being too closely linked to the Chinese Communist government and is worried about the use of Huawei technology for spying against the United States. For its part, Huawei repeatedly asserted that she was independent of the Chinese government.
A White House spokesperson was not immediately available to respond to CNBC's request for comment on Cramer's remarks.
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