Trump’s Huawei ban is hurting these U.S. companies' stock


Huawei, the Chinese telecom giant caught in the center of the U.S.-China trade war, has scrambled to keep its business running after President Donald Trump moved to ban U.S. companies from supplying components to it last week. But Huawei is hardly the only company taking a hit. Many U.S. companies, which are Huawei’s suppliers, are also feeling the heat.

Chipmakers including Intel (INTC), Qualcomm (QCOM), Xilinx (XLNX), and Broadcom (AVGO) have stopped supplying Huawei until further notice, according to Bloomberg. Their shares have been slammed following the ban, which means they could lose a top client.

Broadcom shares, for example, fell more than 5% on Monday. In the third quarter of 2018, the semiconductor maker pocketed $285 million from Huawei, accounting for about 6% of its total revenue. Shares of NeoPhotonics, a San Jose, Calif.-based networking modules manufacturer, plunged more than 30% from last week following the ban, due to its dependence on Huawei.

Chipmakers' shares are getting slammed by the Huawei ban.
Chipmakers' shares are getting slammed by the Huawei ban.

Huawei released a list of its key suppliers for the first time in November 2018. Thirty-three U.S. companies, including Qualcomm, Intel and Broadcom are among its 92 core suppliers.

“They are good customers, and they buy products, which obviously helps their products be competitive in the global export market. And I hope they continue to do so,” said Hock Tan, CEO of Broadcom, referring to Huawei in March. “But certainly, the overhang of that is something that we are closely monitoring and are very concerned about.”

Huawei has long been seen as a national security concern by Washington, although the company has repeatedly denied its ties with the Chinese government. Huawei CFO Meng Wanzhou is facing extradition to the U.S. for bank fraud charges and alleged sanction-busting dealings with Iran. Following Trump’s executive order last week stating “foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services,” the U.S. Department of Commerce believed Huawei is engaged in activities “that are contrary to U.S. national security or foreign policy interest.” The addition of Huawei to the “Entity List” means that U.S. companies may need a license to sell to the Chinese company.

Top U.S.-based Huawei suppliers
Top U.S.-based Huawei suppliers

Some companies have even revised their revenue projections in the wake of the ban. On Monday, Lumentum (LITE), a California-based optical and photonic products manufacturer, cut the lower end of its revenue guidance for the current quarter by 7.4%, to $375 million from $405 million. It has discontinued all shipments to Huawei following the U.S. Department of Commerce ban and said it “cannot predict when it will be able to resume shipments.” Sales to Huawei contributed 18% to Lumentum’s total revenue in its latest quarter.

Here is the list of Huawei’s top U.S. suppliers, according to Goldman Sachs:

Intel (INTC)

Advanced Micro Device (AMD)

Broadcom (AVGO)

Qualcomm (QCOM)

Microsoft (MSFT)

Nvidia (NVDA)

CommScope (COMM)

Texas Instruments (TXN)

Seagate Technology (STX)

Micron Technology (MU)

Qorvo (QRVO)

Flex (FLEX)

Skyworks (SWKS)

Corning (GLW)

Analog Devices (ADI)

NeoPhotonics (NPTN)

Western Digital (WDC)

Lumentum (LITE)


Finisar (FNSR)

Maxim Integrated (MXIM)

Keysight Technology (KEYS)

Marvell Technology (MRVL)

(Note: The story has been updated with context in the seventh paragraph.)

Write to Krystal Hu via or follow her on Twitter.

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