Analog Devices Top Line to Be Cut From US' Huawei Ban
Analog Devices, Inc. expects a roughly $120 million revenue hit in its quarter ending Aug. 3 from the Trump administration’s “recently announced export restrictions on a large communications company,” said the chipmaker Wednesday after such a crackdown on Huawei (see…
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1905160081). “We have ceased shipments of products to that company, and we are currently reviewing our ability to resume shipments under the recently announced temporary general license” (see 1905210013), said ADI. It's forecasting Q3 revenue of $1.45 billion, plus or minus $50 million, compared with $1.57 billion in the year-earlier quarter. This accounts for "these restrictions, including no revenue from that customer for the remainder of the quarter,” said Chief Financial Officer Prashanth Mahendra-Rajah on the Q3 call. “ADI has an extremely diverse business.” Despite the “short-term impact on our communications business, our business is global, broad and robust, and we’ll manage through this,” said CEO Vincent Roche. The chipmaker is in a very "gray situation here," said Roche when asked about ADI's ability to recoup from other communications customers the business lost through Huawei. ADI sees 5G as a "transcendental technology," said Roche. "We're seeing trials in Japan and Korea at this point in time, but it's really yet to begin in earnest in any volume. That's probably going to come in the 2020 time frame."