Shares in chipmaker IQE plunged almost 40 per cent this morning after it revised down its full-year revenue and profit guidance due to the US trade ban on Huawei.
The Cardiff-headquartered firm, which makes semiconductor wafers for smartphone brands including Apple, warned restrictions on the Chinese tech firm, coupled with a slowdown in the global smartphone market, had led to a sharp fall in demand.
IQE said it now expected full-year revenue of between £140m and £160m, compared to analysts’ consensus of £175m.
The firm said it expected to remain profitable in 2019, but with adjusted operating profit margin “significantly below” previous guidance of 10 per cent.
Dr Drew Nelson, IQE chief executive, said the addition of Huawei to a US trade blacklist was having a “far-reaching and long-lasting impact”.
“These are unprecedented times for the global semiconductor industry as geo-political conditions affect interconnected global supply chains,” he added.
US President Donald Trump has rolled out restrictions on American companies doing business with Huawei, amid fears its technology could be used for spying.
IQE’s profit warning sent shockwaves through the semiconductor market this morning, sending shares down in a number of rival firms.
Siltronic and Infineon fell as much as two per cent and one per cent respectively. Shares in AMS dropped more than four per cent, while STMircoelectronics slipped roughly 1.5 per cent.
Huawei has admitted it expects annual revenue to fall by $30bn (£23.6bn) due to a fall in demand after the US ban.
Apple has also forecast a drop in sales for its flagship iPhone product, prompted by falling consumer demand for the latest smartphone models.