By WSJ City

Broadcom said it would make $2bn less in annual sales than expected following the US ban on exports to Chinese telecom giant Huawei, becoming one of the first big chip makers to quantify the financial impact of the Trump administration's escalating trade dispute.

KEY FACTS

--- Few chip companies have reported results since the ban, leaving economic effects difficult to measure.

--- Broadcom's lower full-year revenue forecast ($22.5bn, down from $24.5bn) shows the impact of the ban.

--- It also missed revenue Q2 targets, citing slowing sales in its wireless business as well as the trade spat.

--- The company reaped $900m of revenue from Huawei in its previous fiscal year.

--- Some smaller chip companies have already warned that the Huawei ban will ding their revenue.

--- Qorvo and Lumentum both reduced their quarterly revenue guidance last month by about $50m.

--- Analog Devices, a larger firm, gave guidance for Q3 that came in around $100m below analysts expectations.

Why This Matters

Broadcom's gloomier guidance could spread across the semiconductor industry as other big players, including Qualcomm and Intel, begin to reconsider their outlooks in light of the Huawei ban and a broader anxiety about the geopolitical future, analysts say. Huawei is one of the US chip industry's most lucrative customers.

A fuller story is available on WSJ.com

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(END) Dow Jones Newswires

June 14, 2019 06:27 ET (10:27 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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