Lattice Semiconductor leads chip stocks lower amid potential tariff impact on outlook
May 06, 2025 11:28 AM ET
Lattice Semiconductor (NASDAQ: LSCC) led chip stocks lower on Tuesday after the company warned of a potential indirect impact from tariffs on its outlook.
"As we move into our outlook for Q2, we realize that the macro environment and geopolitical situation, particularly tariffs, are top of mind," said CFO Lorenzo Flores on the company's earnings call. "The takeaway is that, based on available information, we expect the direct impact of tariffs on our business to be limited, but we are highly aware of potential indirect impacts."
Flores pointed that over the past couple of years, about 80% of the company's revenue came from outside the U.S. He noted that, according to their assessment, this likely mitigates the potential direct impact of a tariff on the overall business.
Flores then talked about the company's supply chain. He said the company relies on foundries in Taiwan, Korea and Japan for wafers for its semiconductor products, and they mainly rely on their assembly and test partners in Malaysia and Taiwan. Much of our product flow does not cross the U.S. border, he added. "That said, we think it is prudent to work with our customers and distribution partners to mitigate the logistical and economic disruption from potential tariff regimes," said Flores.
CEO Ford Tamer noted that it has been a period of "historic volatility and uncertainty around the new tariffs as they affect the global economy and our industry." Tamer added that "in general, we're not seeing any material impact from the new tariffs at this time and we are highly aware of potential indirect impacts.
Tamer noted that the company, "like others in the semiconductor industry, are actively monitoring the situation, especially as it relates to potential impact to our second half outlook."
Shares of Lattice tumbled about 12%, while GlobalFoundries (NASDAQ: GFS) fell nearly 3% on Tuesday despite its first quarter 2025 results surpassing estimates.
Meanwhile, Taiwan Semiconductor Manufacturing ( TSM), Intel ( INTC) and NXP Semiconductors ( NXPI) dipped about 2% each. Texas Instruments ( TXN), Analog Devices ( ADI), Marvell Technology ( MRVL), STMicroelectronics ( STM), and ON Semiconductor ( ON) each slipped about 1%.
AI chipmakers Nvidia ( NVDA) fell about 1%, while Advanced Micro Devices ( AMD) declined around 2%. Broadcom ( AVGO) and Qualcomm ( QCOM) were largely flat but in the red.
Meanwhile, chip equipment makers: Applied Materials ( AMAT), KLA ( KLAC), and Lam Research ( LRCX) each fell nearly 1%, while Dutch company ASML ( ASML) was also in the red.
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