Chipmakers Broadcom's  Stock Sank 6% By Huawei Ban

The Semiconductor World(SemiW) reported that Broadcom earnings report released, Broadcom reported disappointing earnings, the stock price fell as much as 6% this morning.

Broadcom is a leading provider of data centers and mobile device chips in the US. Broadcom's second-quarter earnings report reported earnings per share of $5.21, it’s a little bit higher than analysts' expectations of US holding company Refinitiv.

But Wall Street is more interested in Broadcom's revenue. Broadcom’s revenue increased 10% year-on-year, reaching 5.52 billion US dollars, but lower than analysts' forecast of 5.68 billion US dollars. Broadcom lowered its guidance for the full 2019 fiscal year. Broadcom cut its 2019 previous revenue guidance by $2 billion to $22.5 billion.

Broadcom CEO Hock Tan blamed the drop on the current trade dispute between the US and China. Tan said in a conference call with analysts that Broadcom is experiencing “We currently see a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers.”

Huawei Technologies Co., Ltd. is one of the largest customers, which was blacklisted by the US Department of Commerce last month. Tan told analysts that Broadcom received $900 million in revenue from Chinese companies last year. He also said that another reason for chipmaker Broadcom to experience a "broad-based slowdown" is that handset makers have reduced orders due to tight China and US trade relations.

Broadcom's disappointing earnings report weighed on other chip stocks. According to Reuters, Intel, Qualcomm and Advanced Micro Devices fell more than 2.5% in early morning trading,  though they’ve since recovered somewhat. Major European semiconductor manufacturers such as Infineon Technologies, have taken a hit as well.

Broadcom lowered its forecast after their peers. Skyworks and Lumentum Holdings, which sell semiconductors for communications systems, both lowered their revenue guidance in the context of Huawei's ban.