Xilinx (XLNX) - Get Report raised its revenue forecast for its fiscal first quarter Monday, citing better-than-expected revenues for its wired and wireless group and its data center group as well as accelerated orders ahead of new U.S. restrictions on sales to Chinese tech firm Huawei.
The company said it expects to report revenue of $720 million to $734 million for the period ended June 27. It had previously offered guidance of $660 million to $720 million.
"While we have seen some COVID-19 related impacts during the June quarter, our business has generally performed well overall, with stronger than expected revenues in our Wired and Wireless Group and Data Center Group more than offsetting weaker than expected revenues in our consumer-oriented end markets, including automotive, broadcast, and consumer," said Victor Peng, Xilinx’s president and CEO, in a statement.
In addition, “a portion of the revenue strength in the quarter was due to customers accelerating orders following recent changes to the U.S. government restrictions on sales of certain of our products to international customers.”
In May, the U.S. Commerce Department imposed restrictions on the sale of technology to Huawei by companies in third countries that use U.S. designs and software. Sales by U.S. based companies to Huawei had already been restricted. The move was made “to protect U.S. national security by restricting Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad,” according to a Commerce Department statement on May 15. The department allowed a 120-day grace period before the new rules went into effect.
The U.S. has sought to isolate Huawei, China’s largest telecom equipment maker, because of concerns over technology theft and the potential for its equipment to enable Chinese government surveillance.
Shares of Xilinx rose 7.04, or 7.7%, to $99 in after-hours trading.