Huawei CEO expects sales to drop to US$100 billion in 2019, 2020
HONG KONG: Chinese tech firm Huawei Technologies expects sales to drop to around US$100 billion this year and the next, CEO Ren Zhengfei said on Monday (Jun 17), as its business comes under pressure due to US sanctions.
The company had reported revenue of 721.2 billion yuan (US$104.16 billion) last year, up 19.5 per cent from 2017.
Ren said he expects a revival in the business in 2021.
“In 2021, we will regain our vitality and (continue to) provide services to human society,” he said.
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Factfile on China’s Huawei, including revenues, core business areas, patent applications and smartphone market share. (Graphic: AFP / Gal ROMA AND Sophie RAMIS)
Huawei will not cut research and development spending despite the expected hit to the company’s finances, said Ren.
However, he added, the company will slash production over the next two years as it grapples with the US push to isolate the company internationally.
“In the coming two years, the company will cut production by US$30 billion,” Ren said.
Ren was speaking at an event at the company’s Shenzhen headquarters with US tech experts George Gilder and Nicholas Negroponte.
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The US government put Huawei on a trade blacklist in May that bars US suppliers from doing business with it because of what Washington says are national security concerns.
At the time, Ren said the restrictions “may slow, but only slightly” the company’s growth.
President Donald Trump’s administration has essentially banned Huawei from the huge US market and barred American tech companies from supplying the Chinese company with vital components without permission from Washington.
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Washington fears that systems built by Huawei, the world’s leader in telecom equipment and the number two smartphone producer, could be used by China’s government for espionage.
The Trump administration also is pressuring other countries to ban Huawei equipment from their networks, particularly in the coming rollout of super-fast 5G networks, a project in which Huawei had been expected to play a leading role.
The US campaign has already spurred a number of major technology companies, including major semi-conductor suppliers and brands such as Facebook and Google, to suspend cooperation with Huawei.