Export Permits Revoked: Intel and Qualcomm Face Declines

On Wednesday, both Intel and Qualcomm witnessed declines in their stock prices following the U.S. government’s decision to revoke export permits crucial for the companies to supply semiconductors to Huawei, a China-based PC and mobile phone manufacturer. This move comes after Bloomberg initially reported the news late Tuesday.

Intel’s Response and Projections

In a submission to the Securities and Exchange Commission (SEC) on Wednesday, Intel disclosed that the U.S. Department of Commerce is revoking specific licenses for the export of consumer-related goods to a client in China, effective immediately. While Intel refrained from confirming whether Huawei was the client in question, Qualcomm explicitly acknowledged Huawei’s involvement.

Intel’s disclosure of revoked export licenses to China sparks concerns over tech trade tensions, according to WSJ Print Subscription.

Qualcomm’s Statement

Qualcomm announced that the Commerce Department had canceled specific export permits for Huawei within their sector, resulting in the impact on one of their permits. Despite encountering this setback, Qualcomm remained steadfast in its commitment to adhering to all relevant export control regulations.

Financial Impact and Analyst Insights

Both companies anticipate a negative financial impact from these developments. Intel expects its second-quarter revenues to fall below the midpoint of its initial guidance range. According to securities filings, China constituted a significant portion of both companies’ revenues in 2023, highlighting the potential impact of export control measures.

Stacy Rasgon, an analyst, noted Qualcomm’s prior acknowledgment of Huawei’s revenue decline, foreseeing still notable earnings implications. Rasgon predicts Qualcomm and Intel may face a slight setback, with Intel’s exposure amounting to $500 million to $1 billion annually.

Market Response

Following the announcement, Intel witnessed a notable decline of 2.5%, with its shares tumbling to $29.91, reflecting investor sentiment. Similarly, Qualcomm experienced a slight dip of 0.3%, trading at $179.53, suggesting a nuanced reaction among market participants.

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