Export Restrictions Force Xilinx to Remove Huawei Revenue From FY 2020 Outlook
Commerce Department export restrictions forced chipmaker Xilinx to remove all remaining Huawei-related “revenue expectations” from its outlook for fiscal 2020 ending in March, said CEO Victor Peng on a fiscal Q2 call Wednesday. He cited "trade restrictions with Huawei and…
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the uncertainty presented to our business." He hopes "agreement between the U.S. and Chinese governments is reached as soon as possible, so we can resume engaging in a manner consistent with an important customer.” Xilinx got about $50 million revenue from Huawei in the first half ended Sept. 28, the “vast majority in Q1 before the restrictions, he said. Q2 sales in the Xilinx Wired and Wireless Group in which the Huawei business resides were down 8 percent sequentially, said Peng. Xilinx gets about 8 percent of its total revenue from Huawei in a normal year, he said. Though Xilinx “expedited” license applications, it hasn’t landed approvals, he said. Commerce got 200-plus Huawei-related license requests since the Chinese company was added to the agency’s entity list (see 1910230029). Huawei and Commerce didn't comment Thursday. Xilinx determined in Q2 there were some “older products that we could legally continue to ship” to Huawei, said Peng. It turned out that revenue from those products was “essentially negligible,” he said. “After one quarter of seeing that and not seeing any additional license approvals, we have decided that it's just prudent to take all the risk out.”