Some US companies have resumed supplying to Huawei

Some US companies have resumed supplying to Huawei

Yesterday we told you that USA based chip maker Micron Technologies did some research and discovered that it could legally ship some of its products to Huawei.

Sanjay Mehrotra, the chief executive officer and president of Micron Technology, said the company was able to starting shipping some of orders to Huawei again after reviewing its shipments and the details of the ban.

"If Huawei continues to be on the entity list, then in fiscal year 2020 as well, we would have an impact compared to what our revenue with Huawei would have been if they were not on the entity listing", Mehrotra said.

U.S. chipmakers continue to sell product to Huawei, despite a Trump administration ban on the sale of United States technology to the Chinese telecom giant.

Micron was forced to halt shipments to one of its largest customers after the Trump administration banned Huawei from buying American technology. (NASDAQ:MU) will post sales of $4.66 billion for the current quarter, Zacks reports. Others are not taking such a hard line stance because they are concerned with how the ban is affecting US companies; after all, Qualcomm spent $11 billion on USA sourced parts, components, and software in 2018. Huawei has repeatedly denied that charge.

The US government seems to be losing its battle to suffocate Huawei as its own companies look for ways to keep doing business with it. Micron Technology, Inc. (NASDAQ:MU) has declined 27.53% since June 26, 2018 and is downtrending.

As we have discussed with the USA government, it is now clear some items may be supplied to Huawei consistent with the Entity List and applicable regulations.

The Semiconductor Industry Association, which counts both Intel and Micron as members, believes there are still sales that can be made from US companies to Huawei.

Trump's move to block sales to Huawei by putting it on an "entity list" sparked confusion for the telecoms giant and among its American suppliers, insiders told The New York Times. The company estimated fiscal fourth-quarter revenue of $4.3bn to $4.7bn, with a midpoint slightly below analysts' estimates of $4.56bn, according to data from Refinitiv. The company said on Tuesday it will cut output by as much as 10% to help bring its supply in line with market demand.

In the release, MU said that it is expecting that global DRAM semiconductor demand will see healthy year over year demand.

The company has also been clamping down on capital expenditures, a closely-watched metric in the cash-intensive chipmaking business. Early this year, Micron announced the first 1TB MicroSD card in the world.

Non-GAAP (adjusted) earnings per share came in at $1.05, down 66.7% year over year but $0.26 better than analysts were expecting. Eight analysts have provided estimates for Micron Technology's earnings, with the highest sales estimate coming in at $4.81 billion and the lowest estimate coming in at $4.51 billion.

The company reported earnings per share of $US1.05, beating Wall Street expectations of $US0.78, and revenue of $US4.79 billion, which exceeded the average forecast of $US4.68 billion.

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