Broadcom was stung by US Huawei ban, dragging chipmaking industry down

Chipmaker Broadcom is struggling as the United States’ crackdown on Huawei continues to reverberate.

Broadcom’s stock sank nearly 9% in premarket trading after it missed analysts’ revenue expectations and slashed its full-year revenue outlook by $2 billion. The surprising report dragged the rest of the chip sector stocks down with it.

CEO Hock Tan partly blamed the outlook on the Trump administration’s ban on US companies selling components to Huawei.

“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 customers,” Tan said in a conference call with investors late Thursday.

Huawei accounted for $900 million of Broadcom’s sales last year, but Tan said that the lowered guidance “obviously extends beyond just one particular customer.”

Last month, the Trump administration imposed restrictions on American companies doing business with Huawei.The government is barring US companies from using telecommunications equipment from sources the administration deems national security threats, including Huawei.

The US Commerce Department added Huawei to the list of companies the US government considers to be undermining American interests. But the agency did temporarily ease its restrictions days later.

Other chip stocks fell in unison with Broadom in Friday premarket trading: Advanced Micro Devices, Micron Technology and Nvidia are down more than 3% and Qualcomm is dipped more than 2%.

Micron CEO Sanjay Mehrotra said at a Hong Kong technology conference on Friday that the Huawei ban has added some uncertainty to the field.

“It does bring some turbulence within the semiconductor industry,” he said.

After the US order came out Micron stopped shipments to Huawei, but “legal minds at the company continue to study that order and understand what can be shipped and what cannot be shipped to Huawei,” Mehotra said.

Huawei was Micron’s largest customer last year, accounting for 13% of Micron’s sales.

— CNN Business’ Sherisse Pham contributed to this report.