Xilinx Asks U.S. to Allow Broader Shipments to Huawei

Xilinx Asks U.S. to Allow Broader Shipments to Huawei
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Xilinx said its financial results were hurt by the U.S. government ban against Huawei and asked for permission to resume broader shipments to its Chinese customer, according to Bloomberg.

Xilinx’s earnings report highlighted the difficulty U.S. chipmakers are facing as they try to navigate a trade dispute between the two countries. The comments by company executives were among the most detailed insights provided to date into an issue that’s causing uncertainty for the $470-billion chip industry.

The chipmaker halted all sales to the Chinese company after it was blacklisted in mid-May by the U.S. government, Xilinx CEO Victor Peng said on a conference call. It resumed supply of some older parts, but isn’t providing its customer with components for 5G network equipment, he said. “We determined that we could lawfully resume shipping select products,“ Peng said. “What we’ve applied for is for some additional products but certainly not all of them.“

He cautioned that he can’t predict whether Xilinx will get a license to resume its business with Huawei at a higher level. Some areas are off limits because of security constraints and he can’t predict when his company might receive approval from the U.S. Department of Commerce. Typically, it takes 69 days to get a response from the government to such requests, but Peng said he hopes the discussion at a meeting among industry executives and administration officials at the White House earlier this week will lead to a faster process.

The Chinese telecommunications company accounts for as much as 8% of Xilinx’s revenue, according to an estimate by KeyBank Capital Markets. Even with orders disrupted to that customer, Xilinx reported that quarterly revenue grew 24% to $849.6 million from a year earlier. “Considering that one of the leaders in wireless did get impacted, clearly then the macro picture is quite good,“ Peng said in an interview.