Huawei’s Effects in US - Falling Semiconductor Stocks and Google Concerns
The share prices of U.S. semiconductor firms have taken a beating thanks to the U.S.'s blacklisting of Huawei. Companies such as Qorvo, Skyworks and Lumentum have explicitly downgraded their revenue forecasts, and semiconductor-tracking ETFs have performed even worse than the Nasdaq Composite in the last month, notes Fortune newsletter. The war will not affect only China.
Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the amount of electronics manufacturers relying on U.S. chips.
A number of exchange-traded funds (ETFs) that track semiconductors have performed worse than the Nasdaq Composite in the past month. The Direxion Semiconductor Bull 3X Shares ETF, which counts Qualcomm and Texas Instruments as its top individual stock holdings, is down more than 34% in the last month. The ProShares Ultra Semiconductors, which has Intel as its top holding, is down nearly 25%.
As the semiconductor firms see stock bloodbath, Google is worried that Huawei will eat its cake: "Google wants to be exempted from the Trump administration's ban on exports to Huawei, and it's using national security interests (one of the justifications for the ban itself) as the basis for its argument. The logic goes thusly: stop Huawei being able to use Google's version of Android, and Huawei will end up developing its own version of Android, which will be more easily hackable by the Chinese government among others." (Fortune)