At the end of the week, the reporting quarterly conference of Broadcom, one of the leading manufacturers of chips for network and telecommunications equipment, took place. This is one of the first companies to report revenue after Washington imposed sanctions against Chinese Huawei Technologies. In fact, it became the first example of what many people prefer not to talk about yet - the American sector of the economy is starting to lose a lot of money. But you have to speak. The next two months will see a series of quarterly reports and companies will need to blame someone or something for lost revenue and profits.
According to Broadcom's forecast, in 2019, due to the ban on selling chips to Huawei, the direct and indirect losses of the American manufacturer could amount to $ 2 billion. The funny thing is that Broadcom became American just two years ago after Donald Trump's tax reform. If not for the forced transfer of the company's headquarters to the United States at the end of 2017, then Broadcom would have remained in the jurisdiction of Singapore and could (probably) supply Huawei products without any problems. In 2018, Huawei brought in $900 million to Broadcom, and this revenue promised to grow in 2019. Broadcom also sees indirect losses from Washington sanctions, which it will suffer due to reduced sales to third companies that are also Huawei customers.
In the wake of this "happy" news, Broadcom shares collapsed by almost 9%. The company lost $9 billion in market value overnight. Quite predictably, this news affected the share price of all or many companies in the semiconductor sector. Thus, the shares of Qualcomm, Applied Materials, Intel, Advanced Micro Devices and Xilinx fell by 1,5% to 3%. If in Europe they thought that they would sit out, then investors showed that they would not come out: the shares of STMicroelectronics, Infineon and AMS showed a decrease. Other companies also suffered. Apple shares fell 1%.
Micron's quarterly report is expected in 10 days. Micron's CEO was cautious some time ago that the sanctions "bring uncertainty" to the microelectronics market. The company will announce the amount of uncertainty in less than two weeks. Analysts are waiting for recognition of similar losses from Western Digital and other companies. As one of the European traders said, whom he quoted : "Farewell, hopes for recovery in the second half of the year!".
Source: 3dnews.ru