May 24, 2019 / 6:47 AM / 3 months ago

UK's IQE flags possible order delays from Huawei ban

A Huawei company logo is seen at Huawei's Shanghai Research Center in Shanghai, China May 22, 2019. REUTERS/Aly Song/File Photo

(Reuters) - Britain’s IQE Plc said on Friday the U.S. blacklisting of Chinese telecom company Huawei could lead to some delay in orders and the need for adjustment of supplier managed inventory levels, mainly in its wireless business unit.

IQE, which makes semiconductor wafers for chips used in Apple products among others, said less than 5% of its financial year 2019 revenue was exposed to risk from the Huawei issue.

“The recent ban on sales of products from US companies to Huawei and its affiliates is a factor completely outside of IQE’s control ... we believe the ban will have a limited impact on our mid to long term revenue trajectory,” Chief Executive Officer Drew Nelson said.

The United States blocked Huawei from buying U.S. goods last week, a major escalation in the trade war between the world’s two top economies, saying the firm was involved in activities contrary to national security.

The Trump administration softened its stance slightly this week by granting the firm a licence to buy U.S. goods until Aug. 19 to minimize disruption for customers.

IQE said it supplies epitaxial wafers to multiple chip companies, some of whom supply Huawei, adding that it had engaged with customers.

IQE’s core business is the manufacture of compound semiconductor wafers or “epiwafers” using a process called epitaxy, the first stage in the process of manufacturing the critical components in a wide range of devices including mobile handsets, solar cells and LEDs.

The company said it has supply relationships with many customers outside the United States and can adapt to mid to long-term share shifts at both the chip and the original equipment manufacturer level.

Reporting by Noor Zainab Hussain in Bengaluru; editing by Patrick Graham

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