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Trade war

US chip supplier Qorvo lowers sales outlook due to Huawei ban

Reliance on Chinese giant starts to hurt midsize American companies

The downward revision follows compatriot Lumentum Holdings lowered revenue forecast earlier this week. (Photo by Rie Ishi)

PALO ALTO, U.S. -- Semiconductor supplier Qorvo downgraded its sales forecast on Tuesday following U.S. President Donald Trump's decision to block exports to its key customer, China's Huawei Technologies.

The American company slashed its sales forecast for the April-June quarter by as much as 9%, down to between $730 and $750 million from the previously forecast range of $780 to $800 million.

Midsize companies like Qorvo that rely heavily on Huawei have begun to feel the sting of Trump's ban.

Earlier this week, compatriot Lumentum Holdings lowered its revenue forecast for the same reason.

Until the ban, Qorvo supplied parts for Huawei smartphones and wireless base stations. While the company also sells to Apple, sales to Huawei accounted for 15%, or $469 million, of revenue in fiscal 2018 ended March.

After the U.S. Department of Commerce added Huawei to its export blacklist, Qorvo stopped doing business with the Chinese company.

"Qorvo has ceased shipments to Huawei and its affiliates and cannot predict when it will be able to resume such shipments," the company said.

Other midsize American companies that count Huawei as a big customer are also likely to lower sales forecasts.

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