Huawei’s ban lift sees the semiconductor stocks sharp rise


Huawei

Some days ago, the United States president, Donald Trump, announced at a press conference that he would allow US companies to continue selling products to Huawei. Trump said that Huawei’s products are very complex products produced in Silicon Valley in the United States. These American companies are great and will drive employment, so American companies are allowed to continue selling products to Huawei. In other words, Huawei’s ban has been lifted.

This action by the US president seems to have had an immediate impact of American chip suppliers especially those that cooperate with Huawei.  The US stocks opened today and the stocks of the semiconductor industry rose sharply, especially the chip companies that have cooperation with Huawei. Among them, Micron Technology (MU.O) rose 6.3 %, and NVIDIA (NVDA.O) rose 5.12. %, Qualcomm (QCOM.O) rose 5.38% , Western Digital (WDC.O) rose 5.23% , and AMD (AMD.O) rose 5.2%. 

Recall that many American companies like Broadcom have experienced depressing finances since Huawei’s ban commenced. Most recently, Google had to inform the US government that the clampdown on Huawei poses a risk to many other companies and not just Huawei. Apparently, other US companies had contacted the government. Huawei has a stronghold on the smartphone and telecommunication market, especially in 5G technology.

Yesterday, the Chairman of the American Economic Committee, Larry Kudlow, explained the ban in more detail in a television interview. He said that the lifting of the ban is about to take effect, and the Ministry of Commerce will provide some licenses for companies that need to be lifted. Regarding the scope of the lifting of the ban, he stressed that Huawei can only purchase “American chip products that are equally widely sold in other countries”. He denies claims that this move is a “catastrophic mistake” adding that national security is still the most important consideration. He finally said that the United States president does not have the final word on this issue and it will pass through some processes before the conclusion.

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