Friday, 14 June 2019 10:48

Broadcom says Huawei ban will mean US$2b less in revenue Featured

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Broadcom says Huawei ban will mean US$2b less in revenue Courtesy YouTube

Semiconductor and hardware manufacturer Broadcom has said it will take a hit of about US$2 billion in annual sales for its current financial year which ends in November, due to the restrictions placed on Chinese telecommunications equipment vendor Huawei Technologies.

The company made the disclosure during an analysts' call after the announcement of its second-quarter results on Thursday, The Wall Street Journal reported.

Broadcom is the first semiconductor maker to announce any results since the ban on Huawei using American-made components in its products was put in place on 16 May.

Chief executive Hock Tan said the company had made about US$900 million from sales to Huawei in the previous financial year, about 4.3% of its revenue for that year.

The US$2 billion was a reflection of the loss from sales to Huawei and also a lack of confidence among customers, Tan said.

“With respect to semiconductors it is clear that the US-China trade conflict, including the Huawei export ban, is creating economic and political uncertainty and reducing visibility for global [manufacturing] customers."

Other smaller semiconductor firms like Qorvo and Lumentum have both revised their quarterly revenue guidance down by about US$50 million each.

Analog Devices, a bigger company in the same line, said in May that revenue for its third quarter would be about US$100 million below what analysts predict.

The US Government placed Huawei and 68 of its affiliates on its Entity List on 16 May, meaning that the company would have to seek permission to purchase any American components it needed to manufacture its products.

Four days later, Google announced it was cutting off Huawei's access to future updates of Google's Android and Google Play Store.

Huawei, which is now the second biggest smartphone vendor globally after Samsung, uses a customised version of Android on all its smartphones and tablets.

On 21 May, the US Commerce Department eased some of the restrictions until August, allowing Huawei to maintain and update existing networks and handsets.


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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