Huawei Blacklist by Trump hammers Skyworks and other manufacturers

The Huawei blacklist by the Trump administration punishes a number of US technology companies that provide components to Chinese giant networks. The latest to publicly acknowledge the problem is the chip maker Skyworks Solutions.

Skyworks lowered Tuesday its forecast of quarterly profits and turnover, telling investors that it had stopped shipping products to Huawei. Skyworks shares have fallen by more than 1% in long-term trading and have fallen by 12% since May 15, when President Trump signed a decree declaring a national emergency because "foreign opponents create and operate more and more vulnerabilities in information and communications technologies and services ".

The US Department of Commerce has added Huawei and dozens of its subsidiaries to the so-called entity list, banning them from buying products from unlicensed US companies.

"Skyworks ceased all deliveries to Huawei and its subsidiaries from the date that Huawei was added to the list of entities and can not currently predict if and when deliveries will resume," the company said on Tuesday. release, adding that 12% of revenue came from Huawei.

Other companies feel the pain as well. Two weeks ago, Qorvo, which manufactures radio frequency and Wi-Fi products for mobile devices, cut its forecast and announced that it was no longer distributing to Huawei and that she did not know when shipments could resume. Optical components maker Lumentum Holdings has also trimmed its forecast in the Huawei news, while Neophotonics, which manufactures parts to quickly transfer data over networks, has announced a reduction in its inventory.

The stock price of companies has dropped from 12% to 24% since Trump's decree.

"We are probably the largest US public company with a concentrated position within Huawei," said Tim Jenks, CEO of Neophotonics, at the Cowen Technology, Media and Telecom conference in New York. According to its annual report, Neophotonics earns 46% of Huawei's revenues.

Skyworks said that for the third fiscal quarter, which ends later this month, the company has reduced its revenue forecast by $ 60 million, from $ 755 million to $ 775 million. He lowered his earnings per share forecast from 16 cents to $ 1.34. Skyworks also does business with Apple, which generated 47% of total revenues in its last fiscal year.

Following the Commerce Department's announcement last month, the agency eased some short-term restrictions to ensure the business continuity of the telecom companies that used Huawei's products. China reacted to the measures taken by the US stating that it would prepare a list of "unreliable entities" that cut off the flow of products to Chinese companies and "seriously undermine the rights and interests legitimate Chinese enterprises ".

The spat represents the latest escalation of the trade war between the world's two largest economies after the failure of trade negotiations last month. Both countries have imposed more tariffs on billions of dollars worth of goods from their respective products, in addition to intensifying rhetoric.

Even without the blacklist, US technology companies are worried that higher prices will disrupt supply chains and lead to higher prices.

"It is clear that the implementation of additional tariffs on the complete list of products imported from China would have repercussions on the whole sector," HP president HP Wewe told badysts at the press conference. A conference call last month.

Technical executives can only hope that the current dispute is temporary, given the confidence that many companies have in China.

"It's a great company – a $ 120 billion global supply chain," Jenks said. "As a result, we expect them to stay as customers at a certain level."

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