Shares of Broadcom Inc. were falling more than 6% this morning after the chipmaker posted disappointing financial results on Thursday, a drop that has sent ripples through the semiconductor industry.

San Jose, California-based Broadcom is a major supplier of chips for data centers and mobile devices. The company reported earnings of $5.21 per share for the second quarter, slightly higher than what analysts polled by Refinitiv US Holdings Inc. had expected.

But Wall Street was paying more attention to Broadcom’s revenue, which increased 10% year-over-year, to $5.52 billion, yet fell short of the $5.68 billion average analyst projection. Broadcom also cut its sales outlook for the full year. The company now expects to close 2019 with $22.5 billion in revenue, a $2 billion drop from its previous forecast of $22.5 billion.

Broadcom Chief Executive Hock Tan blamed the decline on the ongoing trade dispute between the U.S. and China. Tan said in a call with analysts that the company is seeing “broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers.”

The customer in question is Huawei Technologies Co. Ltd., which was last month blacklisted by the U.S. Commerce Department. Tan told analysts that Broadcom generated $900 million in revenue from the Chinese firm last year. He added that another contributor to the “broad-based slowdown” experienced by the chipmakers is a decrease in orders from handset makers concerned about the U.S.-China trade tensions.

Broadcom’s disappointing earnings report weighed on other chip stocks. Reuters reported that Intel Corp., Qualcomm Inc. and Advanced Micro Devices Inc. had slid more than 2.5% in early morning trading, though they’ve since recovered somewhat. Major European semiconductor makers such as Infineon Technologies AG have taken a hit as well.

The lowered guidance from Broadcom follows recent outlook cuts by other chipmakers. Skyworks Solutions Inc. and Lumentum Holdings Inc., which sell semiconductors for use in communications systems, have both reduced their revenue forecasts against the backdrop of the Huawei trade ban.

Photo: Florian Knodt/Flickr