Friday, 2024 March 1

Chipmaker Micron resumes shipments to Huawei after nosedive in quarterly revenue

Micron, one of the largest US chipmakers, said it had found a way to resume some shipments to Chinese telecoms giant Huawei without breaching the US export ban.

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.

“We have started shipping some orders of those products to Huawei in the last two weeks,” he said.

But given the uncertainty surrounding the Trump administration’s treatment of the Huawei, Mehrotra said the US chip company is “unable to predict the volumes or time periods over which we’ll be able to ship products to Huawei.”

The US Commerce Department placed Huawei on its “Entity list” in May, effectively banning US suppliers from doing business with Huawei without government approval. Micron, together with other US chipmakers, subsequently halted their business dealings with Huawei last month.

Micron’s decision to resume shipments to Huawei comes at a time when the company sees dwindling revenue.

The Idaho-based company booked USD 4.79 billion revenue for the third quarter of its 2019 fiscal year, down 38% from the same period in the previous year.

It is not immediately clear how much of an impact the Huawei ban had on Micron’s declining revenue. Shipments to the Huawei account for about 13% of Micron’s annual sales, according to Bloomberg.

Other US chipmakers have also resumed shipments to Huawei over the past three weeks, according to unnamed sources with knowledge of the sales cited by The New York Times.

“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,” the president of the Semiconductor Industry Association John Neuffer said in a statement last week.


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