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First Round of U.S. Layoffs Due to Huawei Blockade

NeoPhotonics, the Nasdaq-listed producer of various optical communications products, including silicon photonics and photonic integrated circuits (PICs), warned investor this week that the new restrictions on business with China’s Huawei—its largest customer—could have a major impact on future sales. Dave Burstein writes to report: NeoPhotonics has lost $40M in quarterly sales to Huawei, a brutal blow to a company with quarterly sales of ~$100 million. They promise ‘appropriate expense adjustments and structural actions to mitigate the impact of revenue declines.’ That almost definitely means they will fire a lot of people. Huawei makes most of its own optical parts and will probably soon develop an alternative. I suspect Huawei’s purchases were especially high as they stock up to withstand the U.S. blockade.

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Who wrote this? John Poole  –  Sep 1, 2020 8:46 PM

Who actually wrote the above article of disinformation?  This is definitely not from the company’s own press release. Maybe your CircleID Reporter is just misinformed or this is disinformation peddled by Huawei, or by the CCP, picked up and just re-published by your CircleID Reporter? “Blockade”? Your reporter obviously doesn’t understand the difference between a blockade and security restrictions imposed by the US government (BIS DOC) affecting Huawei and affiliates (see the NeoPhotonics press release link above). A “brutal blow”—LOL!—the company press release says:

“.... revenue from customers beyond Huawei is expected to grow 40-50% over the next year independent of potential customer share shifts. Coupled with the upcoming 400ZR and 400ZR+ high speed module opportunity which is expected to begin volume production in 2H 2021, the end market for these products, as defined by high speed ports, is forecasted to increase at an 80% five-year compounded annual growth rate through 2024,” continued Mr. Jenks.”

Your misinformed “CircleID reporter” wrote: “That almost definitely means they will fire a lot of people.” Really? Your reporter didn’t get that from the NeoPhotonics press release. Your reporter really needs “to get a grip!” NeoPhotonics is a small cap company that employs less than 1800 people total globally, spread between China, the U.S., Japan, and Russia. So a few people in China may lose their jobs, next time maybe NeoPhotonics will be more careful with whom they do business!

John,The point Dave was making is that Larry Press  –  Sep 9, 2020 1:11 PM


The point Dave was making is that Huawei has now completed its rushed inventory builldup and NeoPhotonics will not have it’s substantial business in the future.

Don’t think of NeoPhotonics as a mere small-cap company, think of it as a canary in a coal mine and consider the long-run impact of a tech cold-war between China and the US. Which nations would ally with China? Which with the US? Might the war turn hot? What about the global economy? The global climate? What is our goal?

News or Opinion? John Poole  –  Sep 9, 2020 2:55 PM

Larry, don't tell me what or how to think. You and "Dave" are free to think and express your opinions on whatever you wish, but when Dave and CircleID pass off Dave's ill-informed opinions as "news" I am going to call their BS. This is the same crap we deal with on a daily basis now in the mainstream media, and it is time to clearly delineate the difference between a journalist reporting news and someone passing off "opinions" as news. I understand the "narrative" you and Dave apparently share, I object to your attempts to pass off those opinions as news, particularly when the narrative intentionally contains statements that are NOT factual!

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