Lam Research warns of up to $2.5 billion revenue hit from U.S. curbs on China exports
6:24 pm Wednesday, October 19th, 2022
(Reuters) – Chip-making technology provider Lam Research Corp on Wednesday warned of a $2 billion to $2.5 billion revenue hit in 2023 from U.S. curbs on exports of high-end technology shipments to China.
Under sweeping regulations announced by the Joe Biden administration earlier this month, U.S. companies must stop supplying Chinese chipmakers with equipment that can produce relatively advanced chips unless they first obtain a license.
“We have taken the necessary steps to ensure full compliance with the rules and have ceased shipments and support as required,” Chief Executive Officer Timothy Archer said on an analyst call.
Lam Research, which gets 30% of its business from China, is the latest company to flag a hit from the sales restrictions.
Applied Materials Inc last week estimated a $250 million to $550 million drop in net sales in the quarter ending Oct. 30, with a similar impact expected in the following three months.
Lam Research also reported strong first-quarter earnings on Wednesday and gave an upbeat revenue forecast for the current period.
The company expects second-quarter revenue between $4.80 billion and $5.40 billion, the midpoint of which is higher than the $4.91 billion estimated by analysts, according to Refinitiv data.
The December-quarter forecast factors in the impact of export curbs, Archer said.
Shares of Lam Research had initially risen 4% in extended trading on the earnings report but pared most of the gains after the revenue warning.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Vinay Dwivedi)
