Intel (NASDAQ:INTC) announced on Wednesday that the U.S. Department of Commerce has revoked specific export licenses for consumer-related products to a customer in China, a move the chipmaker expects will affect its Q2 revenue.
Intel didn't name the customer in its SEC filing.
The company now projects Q2 revenue between $12.5 billion and $13.5 billion, falling below the midpoint.
INTC shares slipped 2.3% in premarket trading Wednesday.
On Tuesday, Reuters reported that the U.S. government has revoked licenses permitting companies like Intel and Qualcomm (NASDAQ:QCOM) to supply chips for laptops and handsets to Huawei Technologies, the sanctioned Chinese telecom equipment manufacturer.
In their note on this development, analysts said the first-order impact of new Huawei sanctions on QCOM and INTC “seems manageable.”
The investment bank also notes that Huawei continues to pay Qualcomm Technology Licensing (QTL) royalties to Qualcomm, however, their agreement is set to expire in early fiscal year 2025.
Negotiations for renewal are underway, and if Huawei stops paying on the 35 million 4G/5G units they ship, the estimated EPS impact would be just 10 cents, which, again, is “manageable,” analysts noted.