Huawei CEO says underestimated impact of US ban, sees revenue dip

Andrew Cummings
June 17, 2019

Ren, 74, said Huawei planned to cut production by $30 billion over the next two years to ride out the storm.

This is the first time that the Chinese company has quantified the impact of the United States action against the company and Mr Ren's downbeat assessment comes after weeks of defiant comments from company executives who maintained Huawei was technologically self-sufficient.

Mr. Ren has essentially confirmed this report by noting that Huawei has already seen a 40 percent drop in non-China smartphone sales because of the us blacklisting.

American firms are set to lose that business once their 90-day temporary licenses, granted following Washington's blacklisting of Huawei and 70 of its subsidiaries, expire on August 20.

The ban has forced the likes of Google and British chip designer ARM to limit or cease their relationships with the Chinese telecoms giant.

When asked whether he could confirm media reports citing anonymous sources which said its overseas smartphone sales had fallen, Ren said: 'Yes, (sales) have fallen 40 percent'. Ren said the firm's global smartphone shipments plunged 40%.

Huawei, which turned in a revenue of 721.2 billion yuan ($104 billion) last year, expects revenue of around $100 billion this year and the next, Ren said.

The ban bars U.S. suppliers from selling to Huawei, the world's largest telecommunications equipment company, without special approval, because of what the government said were national security issues.

"We can not get components supply, can not participate in many worldwide organisations, can not work closely with many universities, can not use anything with USA components, and can not even establish connection with networks that use such components".

The US, as well as a number of other countries and agencies, have continually pointed out Huawei's ties to the Chinese government as well as emphasising China's National Intelligence Law that says organisations must "support, co-operate with and collaborate in national intelligence work".

The Trump administration last month barred companies from selling US technology to Huawei, saying the company was "engaged in activities that are contrary to USA national security or foreign policy interest". "I think both sides will suffer", he said.

The US fears that systems built by Huawei could be used by China's government for espionage via secret security "backdoors" built into telecom networking equipment.

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