Xilinx Forecast down Due Ongoing US-China Trade War, Huawei Exposure

Xilinx, the US technology firm, which chiefly supplies programmable logic devices like chips to be used in data centers, has come out on Wednesday with the forecast of revenue for the current quarter as well as for the entire year. The figures they have come up with are well below the Wall Street estimations for the same periods. This clearly reflects the impact that the continuing trade war between the US and China has, on the business of the world’s second-largest chipmaker.

According to the company, the forecast has taken into consideration the way US restrictions will affect the business of Huawei Technologies. The forecast has also assumed that no revenue will be generated from the Chinese telecom giant due to the restrictions imposed by the Trump Administration.

Xilinx, which continues to have sales, albeit restricted, to Huawei amidst the ban that was imposed in May has stated that the US Government decided against approving the license application to ship an increased amount of products to Huawei. Xilinx sharesin extended tradeplummeted by almost 2% in the wake of the recent developments.

This dismal picture has irked the analysts as well as the investors with Huawei featuring in 35 post-earning readings of Xilinx, as the brokerages raced against time to gauge the length and breadth of the impact that according to Victor Peng, the CEO of Xilinx, is nothing less than ‘significant’.

Speaking to the reporters, CEO Peng expressed hope that the two governments will finally pen an agreement and resolve this crisis, which is more of a structural issue than anything else. This, he said will let them continue doing trade with Huawei and engage the Chinese giant in a more fruitful and revenue-generating way.

Meanwhile, on Tuesday, Texas Instruments (TI), the global semiconductor designing and manufacturing giant came out with revenue forecast for the present quarter of the year. Strangely, their figures missed the Wall Street targets as well.

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