Micron, US-based Chip manufacturer, resumes shipments for Huawei

Andrew Cummings
June 26, 2019

The company's earnings report comes as several media sources said it and other chipmakers have found ways to get around a us government ban on sales to the Chinese telecommunications giant Huawei Technologies Co.

Micron had stopped all shipments to Huawei after the Commerce Department in May added the Chinese company to a blacklist, a move the Trump administration said would prevent US technology from being used to undermine USA security and policy interests.

"To ensure compliance [with the USA ban], Micron immediately suspended shipments to Huawei and began a review of Micron products sold to Huawei to determine whether they are subject to the imposed restrictions", he said.

If less than 25% of the technology in a chip originates in the US, then it's not covered by the ban, he said.

Huawei has repeatedly denied it is controlled by China's government, military or intelligence services.


Sanjay Mehrotra, Micron's CEO, said that his company had concluded they could "lawfully resume shipping a subset of current products" to Huawei during Micron's earnings call on Tuesday.

Sales to Huawei during the first two quarters of Micron's fiscal year accounted for 13% of Micron's revenue, the company reported earlier.

The New York Times, citing unnamed sources, said U.S. chip makers and others have found ways to continue sales, getting around the sanctions by selling goods made outside the United States.

The report, citing unnamed sources, said U.S. chip makers and others have found ways to continue sales, getting around the sanctions by selling goods made outside the United States. Intel declined to comment.

Micron, based just outside the city of Boise, Idaho, suspended shipments to Huawei on May 15 when the United States government added Huawei to a list of companies banned from trading with U.S. companies. "Each company is impacted differently based on their specific products and supply chains, and each company must evaluate how best to conduct its business and remain in compliance", he wrote. The US's ban on Huawei products is one of the tailwinds that continue to make it hard for Micron to meet its sales targets.


"Huawei's impact on the company's bottom line was far less than many had feared", King said.

To soften the blow from the market glut, Micron reduced its output to prop up prices and has been investing more in its next generation of chips.

American chipmaker Micron Technology Inc. surprised analysts today after reporting third-quarter results that easily beat expectations.

The company has also been clamping down on capital expenditures, a closely-watched metric in the cash-intensive chipmaking business. North Star Inv Corporation holds 1,034 shares.

Chip makers' share prices have been falling in recent months as demand for smartphones has fallen, while the prices of DRAM and NAND memory chips have fallen due to oversupply, exacerbating concerns that the semiconductor industry's two-year rise is about to stop. The firm had revenue of $4.79 billion during the quarter, compared to the consensus estimate of $4.70 billion. In particular, the company said that it has already started to ship some of its smartphone chips to Huawei Technologies.


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