Shares of high-definition video chip designer Ambarella (AMBA - Get Report) plunged on Tuesday after one of the company's biggest customers, China's Hangzhou Hikvision, was blacklisted by the Trump administration.
Shares of Ambarella were down more than 12% at $49.99 in morning trading before recovering somewhat after the Trump administration placed eight Chinese technology companies on a U.S. blacklist, including Hangzhou Hikvision, accusing them of being implicated in human rights violations.
The move, which was announced after U.S. markets closed Monday, came on the same day negotiators from the U.S. and China began working-level preparations for high-level trade talks set to begin Thursday in Washington.
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The blacklisted companies include Hikvision as well as Dahua, according to the Associated Press, which Stifel Nicolaus analyst Tore Svanberg estimates represent about 15% of Ambarella's total revenue, or about 25% of its security camera revenue.
Entities on the list are prohibited from doing business with American companies without being granted a U.S. government license, though some have maintained relationships with banned companies through international subsidiaries.
As of mid-morning, Ambarella shares were down 8.88% at $52.14.
Hangzhou Hikvision is the world's biggest supplier of video surveillance products. Its controlling shares are owned by the Chinese government.