US sanctions weigh on Huawei’s revenues in 2022

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This is evident from the annual report presented on Friday. Profits fell by more than two-thirds to 35.6 billion yuan from the previous year.

At the presentation of the company figures, current CEO Eric Xu was combative: this year will be decisive for Huawei’s survival and development. “While it is true that we are under a lot of pressure, we have what it takes to come out the other side,” Xu said.

According to the annual report, Huawei invested about 161.5 billion yuan in research and development last year – an amount equivalent to about 25 percent of sales.

The US government imposed sanctions on Huawei in 2019 under then-President Donald Trump. Concerns about national security were cited as the reason, because the network supplier and smartphone provider may be cooperating with the Chinese authorities and the military. Huawei has always denied the allegations.

According to press reports, US President Joe Biden is considering tightening sanctions against the company. Huawei could be denied access to semiconductors from major US suppliers such as Qualcomm or Intel. Beijing sees the sanctions as an attempt by rival US to slow China’s technological and political rise in the world.

In response to the US measures, the group has replaced thousands of Western components and opened new business areas in recent years. Huawei had declared “crisis mode” over at the turn of the year. The US sanctions were part of the new reality, Xu stressed at the time.

“In 2022, a challenging external environment and non-market factors further weighed Huawei’s business,” said Xu. “During this storm, we did everything we could to maintain business continuity.”

Major efforts have been made “to generate a steady stream of revenue to ensure our survival and lay the foundations for future development,” Xu said.

Before the US government intervened, Huawei was the second largest supplier of smartphones and wanted to overtake market leader Samsung from South Korea. As a result of the sanctions, the group is no longer allowed to sell devices with fast 5G data transmission and Google services, practically throwing it out of the smartphone market internationally.

At the head of the Chinese telecommunications giant, a politically sensitive personnel change is underway, which could affect its already strained relationship with the US. The daughter of the company’s founder, CFO Meng Wanzhou, who was once targeted by US justice, will take over the group’s rotating presidency for the first time (tomorrow) on Saturday.

Against the background of political tensions between Beijing and Washington, China is currently trying to build a chip industry that functions largely independently of supplies from the West.

(SDA)

Source: Blick