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Chips Stocks Rattled As Companies Halt Supplying China's Huawei

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Chips Stocks Rattled As Companies Halt Supplying China's Huawei

As trade tensions between the United States and China have escalated, companies such as Alphabet Inc (NASDAQ: GOOGL)'s Google have suspended some busniess with Chinese firm Huawei.

What To Know

On May 15, the Trump administration added Huawei to a list of companies that U.S. firms can no longer trade with unless they have a licence. The "entity list" bans the company from acquiring technology from U.S. firms without government approval.

As a result, Google has suspended licensing of Android software to Huawei’s smartphones, while U.S. chipmakers such as Intel (NASDAQ: INTC), Qualcomm (NASDAQ: QCOM) and Broadcom (NASDAQ: AVGO) have told their workers they will stop supplying Huawei, according to Bloomberg.

Why It's Important

The move is having a rippling effect across the industry.

Several other stocks are rattled by the trade war, with several semiconductor names trading lower: Xilinx, Inc. (NASDAQ: XLNX), STMicroelectronics NV (NASDAQ: STM), Taiwan Semiconductor Mfg. Co. Ltd (NASDAQ: TSM), Micron Technology, Inc. (NASDAQ: MU) Advanced Micro Devices, Inc.(NASDAQ: AMD) and NVIDIA Corporation (NASDAQ: NVDA).

In response to the ban, Huawei's Twitter account tweeted, “Lose-Lose, Washington’s decision to force U.S. companies to stop doing business with tech giant #Huawei creates losers on both sides. #HuaweiFacts”

There is widespread speculation China may also temporarily hike tariffs for Apple Inc (NASDAQ: AAPL).

Related Links:

Wall Street Weighs In On Apple's Trade War Risk

What The Trade War Means For The Bond Market

Posted-In: ChinaGovernment News Regulations Rumors Global Top Stories Tech Best of Benzinga

 

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