Semtech Assumes ‘No More Direct Shipments’ to Huawei, Former $100M Customer

Chipmaker Semtech is forecasting revenue of $145 million-$155 million for its fiscal Q3 ending late October. It assumes “no more direct shipments to Huawei” amid the further Commerce Department export restrictions on the Chinese tech company (see 2008170043), said Chief Financial Officer Emeka Chukwu on a quarterly earnings call Wednesday. Q3 revenue would rise about 10% from a year earlier at the high range of the guidance. “Despite the ongoing geopolitical challenges and the macroeconomic headwinds associated with COVID-19, we believe the underlying secular demand for our key growth platforms remains solid,” said Chukwu. Huawei is “an ongoing dynamic situation,” said CEO Mohan Maheswaran. “They used to be a $80 million to $100 million account for us, so it's much, much lower now.” Semtech went with the zero shipments assumption in the guidance because it wants to “eliminate any risk” for investors, he said. “It's not a question of us not wanting to ship them.” Commerce regulations “are changing quite frequently,” he said. “So we take the approach of let's be conservative and assume no shipments.”