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America’s decision to blacklist China’s Huawei five weeks ago is having a clear damaging effect on the global tech industry.
So warns Cardiff-based chipmaker IQE in a profits warning this morning. IQE has slashed its sales forecasts for this year, pinning the blame firmly on the White House for putting Huawei on its Entity List – preventing US companies dealing with the Chinese mobile giant.
In a trading update to the City, IQE warned that it is operating in an “increasingly cautious marketplace”, with several customers recently cutting their forecast orders.
IQE may not be a household name, but its advanced silicon and compound semiconductor materials are used around the world.
Its wafers are used in more than two billion wireless chips and more than one billion optoelectronic chips each year — from smartphones and mobile base stations to satellites, cars and aircraft, and solar panels.
It had previously expected to make revenues of £175m this year — now it only expects to post £140m to £160m.
Chief executive Dr Drew Nelson, chief executive of IQE, says America’s crackdown on Huawei is having serious consequences:
“These are unprecedented times for the global semiconductor industry as geo-political conditions affect interconnected global supply chains. It is now clear that the impact of Huawei’s addition to the US Bureau of Industry and Security’s Entity List is having far-reaching and long-lasting impacts on global supply chains.
This is a matter outside of IQE’s control but we have responded swiftly to leverage our breadth of relationships and to pursue new sales opportunities.
Reaction to follow….
Also coming up today
Oil is hovering near three-week highs, after Iran shot down a US drone yesterday – sparking reports that president Trump gave initial approval for the military to launch retaliatory strikes.
Data firm Markit will release its flash surveys of purchasing managers in the eurozone and the US, which will show if manufacturers are still struggling from the US-China trade war.
Plus, new UK public finance figures will show how much Britain borrowed to balance the books last month.
In April, UK government borrowing came in at £5.8bn, starting off the 2019-20 financial year with nearly the same deficit level as a year ago.
In the 2018-2019 financial year, borrowing came to £23.5bn, slightly worse than the £22.8bn that the Office for Budget Responsibility predicted the March spring statement.
For May, economists expect borrowing to fall to £4.2bn.
- 9am BST: Flash eurozone PMI report for May
- 9.30am BST: UK public finances for May
- 2.45pm BST: Flash US PMI report for May