Published in PC Hardware

Euro chipmakers suffer because of Trump's trade war

by on20 May 2019


Shareholders fear that they might be forced into a global ban

European chipmakers Infineon Technologies, AMS and STMicroelectronics shares fell sharply amid worries  Huawei Technologies suppliers may suspend shipments to the Chinese firm due to a US crackdown.

STMicro was down four percent at the bottom of Paris’ CAC 40, while Infineon fell 3.4 percent to the bottom of Frankfurt’s DAX 30 and AMS was down 4.6 percent this morning.

The selling came after Nikkei Asian Review reported that Infineon had halted shipments to Huawei after Washington added the world’s No. 2 smartphone maker to a trade blacklist last week, imposing restrictions that will make it difficult to do business with US companies.

The report also said STMicro was set to have meetings this week to discuss whether to continue shipping to Huawei.

Germany’s Infineon and France’s STMicro, Europe’s biggest chipmakers, had no immediate comment.

Even if companies can continue to sell components without being subject to US restrictions, any disruption to Huawei’s operations will have a knock-on effect on its suppliers, said Liberum analyst Janardan Menon.

“In coming months it can broadly be assumed that the Huawei portion of their (European chip suppliers’) business will see quite a bit of weakness, if the U.S. government does not change its mind.” 

The selling was particularly amplified as investors exited bullish positions built up in the trade-sensitive sector in recent months as worries about the US-China trade spat eased and companies forecast a recovery in smartphone demand in the second half of the year.


Last modified on 20 May 2019
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