since they have considerable revenue exposure to Huawei. Morgan Stanley estimates that about 10% of Skyworks and Qorvo's sales come from Huawei while Broadcom's exposure is in the mid-single digits. Micron, meanwhile, has had 13% of its sales come from Huawei the past two quarters while Analog Devices' exposure ranges between in the mid-to-high single digits.
"We believe the potential sanctions will push Huawei and other Chinese OEMs to start using more Japanese suppliers and local solutions, despite potentially higher costs compared to US component suppliers," Jun Zhang, China TMT analyst at Rosenblatt Securities, said in a note. "We also think the potential ban on Huawei may drive Chinese consumers to support Huawei and boycott US brand products," including Apple.
The administration's declaration of a national emergency follows a tariff hike on $200 billion worth of Chinese goods earlier this month. China then retaliated by raising levies on $60 billion worth of U.S. products. These moves have knocked down the S&P 500 by more than 2% since May 3. Chipmakers have also struggled. Through Wednesday's close, Micron and Skyworks have fallen 11.4% and 10.1%, respectively, in that time period. Analog Devices is down 7.8% in that time period while Broadcom and Qorvo have lost 3.6% and 2.4%, respectively.
"While this is still only a threat, the implications for the semi supply chain could be very material," Mizuho Securities analyst Vijay Rakesh wrote in a note, referring to the Huawei news. He said Huawei has between 20% and 30% of the global networking and 5G infrastructure market share.
Their stock prices aren't showing that they are struggling...
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