Intel Sees Revenue Falling Below Midpoint on US Huawei Ban
(Bloomberg) -- Intel Corp. expects second-quarter revenue to fall below the midpoint of previously issued projections because of a new US ban on chip exports to Huawei Technologies Co.
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Revenue will remain within the previously guided range of $12.5 billion to $13.5 billion, Intel said in a statement Wednesday, “but below the midpoint.” The company said it continues to expect revenue and earnings per share to grow in 2024 from a year earlier.
On Tuesday, the US revoked licenses allowing Huawei, a Chinese telecommunications giant blacklisted by the US, to buy semiconductors from Intel and rival Qualcomm Inc., according to people familiar with the matter, further tightening export restrictions against the Chinese telecom equipment maker. Withdrawal of the licenses affects US sales of chips for use in Huawei phones and laptops, said the people, who discussed the move on condition of anonymity.
While the decision may not affect a significant volume of chips, it underscores the US government’s determination to curtail China’s access to a broad swath of semiconductor technology. Officials are also considering sanctions against six Chinese firms that they suspect could supply chips to Huawei, which has been on a US trade restrictions list since 2019.
Read More: US Revokes Intel, Qualcomm Licenses to Sell Chips to Huawei (1)
Intel shares extended declines in premarket trading, falling 2.5% to $29.91. Shares of Qualcomm and rival chipmakers Advanced Micro Devices Inc. and Nvidia Corp. also fell in early trading following Intel’s announcement.
Qualcomm recently said that its business with Huawei is already limited and will soon shrink to nothing. It has been allowed to supply the Chinese company with chips that provide older 4G network connections. It’s prohibited from selling ones that allow more advanced 5G access.
Huawei has been tangled up in a web of US restrictions for years in response to concerns that its technology could be used by Beijing as a spy tool.
Read More: Huawei Secretly Backs US Research, Awarding Millions in Prizes
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