US halt Huawei growth

US halt Huawei growth
US halt Huawei growth

Huawei, China’s first global technology brand, recorded sales of mobile phones, equipment for telecommunications networks and other products and services of 891.4 billion yuan (136 billion euros) last year , an increase of 3.8% compared to 2019.

Sales growth has been the weakest since 2000, the year the tech industry was shaken by the collapse of Internet companies’ stock prices, listed on the Nasdaq index.

Huawei is trying to secure access to global markets after the former U.S. administration, chaired by Donald Trump, prevented the group from accessing US technology, including processor chips or Google services.

“This is a very unfair situation for Huawei. It has hurt us a lot,” said President Ken Hu at a press conference at Huawei’s headquarters in Shenzhen, southern China.

Huawei, which denies allegations of being liable to cooperate with Chinese intelligence services, has already sold its low-cost mobile phone brand, Honor, in the hope of recovering sales, saving it from the sanctions imposed on the parent company.

Huawei said it has a chip reserve for its next-generation phones, but executives have admitted that it should run out soon.

Washington extended sanctions by banning global suppliers last year from using U.S. technology to produce ‘chips’ for Huawei.

Huawei founder Ren Zhengfei said last February that there is little chance that sanctions will be lifted.

Although the new American administration has changed the rhetoric towards China, the rivalry policy must remain with Joe Biden.

Ken Hu said US suppliers lost between $ 10 billion to $ 20 billion in annual sales to Huawei.

Hu expressed confidence that global sales will recover as soon as the coronavirus pandemic is brought under control.

“I am very optimistic about the performance of 2021 in regions outside of China, but I cannot give a definitive forecast,” he said.

The confrontation with Washington led the Communist Party of China to aim as a goal for the coming years to increase the autonomy of the technological sector, aiming to depend less on foreign suppliers.

China’s Finance Ministry announced this week that chip makers would be exempt from import taxes on equipment and raw materials by 2030.

Profits of 8.5 billion

Huawei said profits in 2020 rose 3.2% to 64.6 billion yuan (8.5 billion euros), slowing from the 5.6% growth in 2019.

Sales of mobile phones and other consumer products increased 3.3%, compared to 2019, to 487 billion yuan (63 billion euros). In 2019, that unit’s sales recorded a year-on-year growth of 34%.

In a demonstration of the company’s technical capabilities, Huawei launched a foldable mobile phone last February with a 20 cm wide screen. This model, the Mate X2, will only be sold in China, possibly reflecting the shortage of ‘chips’.

Research and development spending, which is already among the highest for any company, has risen to 141.9 billion yuan (18.4 billion euros), or about 16% of the company’s revenues.

Sales of equipment for telecommunications networks remained stable, amounting to 302.6 billion yuan (39.6 billion euros) after Washington pressured allied countries to exclude Huawei from fifth generation (5G) networks .

Chinese officials accuse Washington of using false national security accusations to harm a competitor.

As more people worked from home, sales of technology to manufacturers, healthcare and other companies jumped 23% in 2020 to 103.4 billion yuan (13.1 billion euros).

Huawei says it belongs to Chinese employees, who make up half of its 197,000-strong workforce, spread across 170 countries.

The company started reporting financial results a decade ago, in an attempt to defuse security concerns.

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