Broadcom to take US$2b hit from Huawei ban

BROADCOM Inc. said it would make $2 billion less in annual sales than expected following the U.S. ban on exports to Chinese telecom giant Huawei Technologies Co., becoming one of the first big chip makers to quantify the financial impact of the Trump administration’s escalating trade dispute.

Few U.S. chip companies who ship components to Huawei have reported financial results since the Commerce Department last month placed the Chinese company on the so-called entity list, which bars businesses from supplying U.S. technology to Huawei without a license. That has left the economic effects of the move and broader trade tensions difficult to ascertain.

If Broadcom’s outlook was any indication, however, those effects could be severe, costing U.S. semiconductor companies billions of dollars in sales.

San Jose-based Broadcom, which makes a range of radio-frequency chips and circuits that go inside mobile phones and mobile-networking stations, made around $900 million of revenue from Huawei in its previous fiscal year ended in November, Chief Executive Hock Tan said on a call with analysts. That represented about 4.3% of its total revenue.

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