American Firms Feeling The Pain Of Trump's Huawei Ban

The US ban on Huawei, keeping the company from doing business with US companies, is hurting the very companies that Trump was attempting to protect with this executive order.

Skyworks is the latest to get hit by this ban. Skyworks is a chip maker, and on Tuesday, it lowered its quarterly earnings and revenue forecast. Letting investors know that it had stopped shipping products to Huawei, due to the executive order.

After the company cut its forecast, shares of the company dropped about 1-percent in after hours trading. They are likely to drop more once the market opens on Wednesday. Skyworks stock has been hit pretty hard by the Huawei ban, having dropped 12-percent since May 15 - the day President Trump signed the executive order.

The entire semiconductors industry is getting hit hard by this ban. According to CNBC, exchange-traded funds that have semiconductors like Qualcomm, Texas Instruments and Intel included, are down over 25-percent. With the bigger one being SOXL which is down 34-percent since May 15. This has also forced the NASDAQ to drop into bear market territory, dropping over 10-percent (before jumping 2-percent on Tuesday).

The ban that Trump has put on Huawei, keeping the Chinese company from doing business with US companies, is hurting US companies more than it is Huawei. See, Huawei already does a lot of its own manufacturing. It's a big company, so it can replace many of these partners, with in-house teams. Something it is already doing to replace Android later this year. But companies like Qualcomm, Intel, Google, Microsoft, and others, are going to be hurt much more by this ban.

This is because Huawei is one of the largest smartphone makers in the world. Depending on which analysis you look at, Huawei is either two or three. It's up there with Samsung and Apple. Considering Huawei is not available in the US (for the most part), that is pretty impressive. Since Samsung and Apple's biggest market is the US. Companies not being able to sell chipsets to Huawei is a big deal though. That's a big chunk of their sales, and will force many to scale back.

If Huawei is included in a trade deal with China - which does seem pretty likely - it would likely bring these semiconductor companies back to where they were. As they'll be able to sell to Huawei once again. But Huawei's reputation has been shot during this whole process. The US is alleging that Huawei is being used to spy on users by the Chinese government. Even though the US has failed to provide any proof. Huawei has even said that it would be willing to work with the US government and do a "no-spy" agreement with them. But the US has shown no interest.

Right now, many US companies are feeling the pain from this ban, but Huawei is going to feel it long-term. Particularly in markets outside of China. The Chinese are rallying behind Huawei, as it is a homegrown company, but as for the West, it's going to be tough for Huawei to re-enter those markets after this is all said and done.

Copyright ©2019 Android Headlines. All Rights Reserved
This post may contain affiliate links. See our privacy policy for more information.
You May Like These
More Like This:
About the Author
2018/11/alex-2.jpg

Alexander Maxham

Head Editor
Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]