Qualcomm Inc., the world’s biggest supplier of smartphone chips, suffered its worst stock decline in a month after upheaval in China threatened the company’s sales in a critical market.
The risks for Qualcomm are coming on multiple fronts. Apple Inc.’s iPhone is facing a widening ban in China that would bar the device from government-backed agencies and state companies. Qualcomm is one of the iPhone’s biggest vendors, responsible for the product’s modem chip.
China, including Hong Kong, accounts for roughly two-thirds of Qualcomm’s revenue. So investors are closely watching developments in that market. The stock plunged 7.2% to $106.43 Thursday on the latest news, alongside shares of other mobile-phone suppliers.The Huawei controversy centers on China’s top chipmaker, Semiconductor Manufacturing International Corp., which appears to have violated US sanctions by supplying advanced components to the blacklisted company, US lawmakers said.
Huawei uses an advanced 7-nanometer processor built by SMIC to power its latest smartphone, a teardown commissioned by Bloomberg News showed, indicating that China is making headway in its push to produce cutting-edge semiconductors despite US sanctions. It didn’t include a Qualcomm component, however.
McCaul, Republican chairman of the House Foreign Affairs Committee, has been vocal in protesting what he considers insufficient enforcement of the Entity List, which is enforced by the Commerce Department’s Bureau of Industry and Security and specifies license requirements imposed on restricted exports. Neither McCaul nor his committee have much direct sway over sanctions.
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