Broadcom’s $2.7b warning rattles global chip sector
LONDON/BENGALURU: Broadcom sent a shockwave through the global chip making industry on Friday with its forecast that US-China trade tensions and the ban on doing business with Huawei Technologies would knock US$2 billion (S$2.7 billion) off the company's sales this year.
The forecast, included in the company's second-quarter results, was the hardest evidence yet of the damage President Donald Trump's trade war with Beijing may do to the global industry.
Shares in Broadcom fell as much as 8.6 per cent, wiping more than US$9 billion off the market value of the company, previously based in Asia but now with its headquarters and main listing in the US.
US chipmakers Qualcomm, Applied Materials Inc, Intel Corp, Advanced Micro Devices Inc and Xilinx Inc were all down between 1.5 per cent and 3 per cent.
"We'll see a very sharp impact simply because (there are) no purchases allowed and there's no obvious substitution in place," Chief Executive Officer Hock Tan said on a post-earnings call with analysts on the Huawei ban.
Huawei accounted for about US$900 million, or 4 per cent, of the company's overall sales last year. Broadcom, however, also said the forecast cut "extends beyond one particular customer". - REUTERS