European chipmaker Infineon's shares drop after US crackdown on Huawei

The selling came after Nikkei Asian Review reported that Infineon had halted shipments to Huawei.

European chipmakers Infineon Technologies, AMS and STMicroelectronics fell sharply on Monday amid worries the Huawei Technologies suppliers may suspend shipments to the Chinese firm due to a U.S. crackdown.

European chipmaker Infineons shares drop after US crackdown on Huawei

Infineon

STMicro was down 4 percent at the bottom of Paris’ CAC 40, while Infineon fell 3.4 percent to the bottom of Frankfurt’s DAX 30 and AMS was down 4.6 percent at 0836 GMT.

The selling came after Nikkei Asian Review reported that Infineon had halted shipments to Huawei after Washington added the world’s No. 2 smartphone maker to a trade blacklist last week, imposing restrictions that will make it difficult to do business with US companies.

The report also said STMicro was set to have meetings this week to discuss whether to continue shipping to Huawei.

Germany’s Infineon and France’s STMicro, Europe’s biggest chipmakers, had no immediate comment.

Even if companies can continue to sell components without being subject to US restrictions, any disruption to Huawei’s operations will have a knock-on effect on its suppliers, said Liberum analyst Janardan Menon.

“In coming months it can broadly be assumed that the Huawei portion of their (European chip suppliers’) business will see quite a bit of weakness, if the U.S. government does not change its mind,” he said.

The impact will not be uniform because the companies have different levels of exposure.

The selling was particularly amplified as investors exited bullish positions built up in the trade-sensitive sector in recent months as worries about the US-China trade spat eased and companies forecast a recovery in smartphone demand in the second half of the year.

“With all of the semis commentary geared into a second-half recovery, a sizeable customer having supply issues could push that guidance out,” said a trader.

AMS has almost doubled in value this year, while STM has rise almost 20 percent, outperforming the pan-European STOXX 600 index.

Read more on the Huawei banning saga:

Huawei's Android license has been revoked: Here's what Huawei has to say about it

Huawei's Android licence revoked: What it means for existing Huawei and Honor phone users

Intel and Qualcomm join Google in cutting off ties with Huawei following Trump ban

After Huawei blacklist, 'Boycott Apple' campaign gaining steam in China: Report

German chipmaker Infineon suspends shipments to Huawei after US trade blacklist

Huawei is reportedly releasing its own Android alternative called IndeoenOS this fall

Huawei accuses US of bullying, says working with Google to respond to ban

Huawei doesn't mention Android at its new Honor 20 series smartphone launch event

Huawei's trade ban by the US could advance local Chinese chip suppliers

Huawei CEO Ren Zhengfei claims the US's 90-day reprieve does not bear 'much impact'

Some Huawei Mobile users are considering a switch after Google suspension

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