Broadcom lost 2 billion USD because of the Huawei embargo

Broadcom lowered its forecast for 2019 revenue from $ 24.5 billion to $ 22.5 billion. Other US chip makers also have trouble following a ban on trading with Huawei. According to Reuters, Broadcom Inc, a US-based chip maker, has forecast a 2019-year decrease of $ 2 billion in US-China trade war and a ban on trade with Huawei. This was the first company to claim revenue losses after Donald Trump decided to put Huawei on the list of conditional exports. Broadcom shares lost 8.6% of the value on the stock market, equivalent to $ 9 billion. Other chipmakers in the US, including Qualcomm, Applied Materials, Intel, Advanced Micro Devices and Xilinx, all lost 1.5% -3% of market value. Former partners of Huawei like Analog Devices, Skyworks Solutions and Qorvo are in the same situation. Trading with Chinese technology firm is worth about 900 million USD, equivalent to 4% of Broadcom’s revenue. However, CEO Hock Tan said the impact of this did not stop at one customer. “We are talking about the instability of the whole market, the demand drops because the supply chain is limited,” Tan said. “Currently the market demand is declining on a large scale, we think it comes from political instability as well as the impact of export restrictions on one of its biggest customers.” In its Q2 / 2019 financial report, Broadcom decided to lower its forecast for 2019 revenue from $ 24.5 billion to $ 22.5 billion. The global semiconductor industry is in a difficult time when market demand is low since the end of 2018. According to Texas Instruments’ forecast in April, this situation will continue for the next 2 years. The main reason is the saturation state of the mobile market, while new areas such as self-driving cars and smart devices for home and office are still in the testing phase. The ban on Huawei by the Donal Trump administration and the trade tension between the two powers continue to create more difficulties for producers. Concurrent with Hock Tan, Micron Technology CEO said the ban on trading with Huawei created instability and disturbed the semiconductor industry.