Huawei says US sanctions will cost it billions in revenue
18 Jun 2019

AP — Huawei’s founder said Monday that the Chinese telecom giant’s revenue will be $30 billion less than forecast over the next two years, as he compared the company to a “badly damaged plane” as a result of U.S. government actions against it.

“We never thought that the U.S.’s determination to attack Huawei would be so strong, so firm,” Ren Zhengfei, who is also the CEO, said during a panel discussion at the company’s headquarters in Shenzhen, China.

Ren said Huawei will reduce capacity and expects revenue of about $100 billion annually for the next two years, compared with $105 billion in 2018. In February, he said the company was targeting $125 billion in 2019.

Huawei’s overseas cellphone sales will drop by 40%, Ren said, confirming a Bloomberg report published Sunday. But the Chinese market is growing rapidly, he said, and Huawei will not allow restrictive measures to curb its research and development.

Huawei is embroiled in a trade dispute between China and the U.S., which has accused Chinese companies such as Huawei of committing forced technology transfers and stealing trade secrets. Last month, the U.S. placed Huawei on its “Entity List,” which effectively bars American companies from selling components to Huawei without government approval.

U.S. suppliers are taking a hit, too. Micron Technologies, Qualcomm, Qorvo and Skyworks Solutions have all listed Huawei as a major customer. Last week, chipmaker Broadcom reduced its 2019 revenue forecast by $2 billion, saying customers are trimming orders because of the trade tensions, including the U.S. curbs on sales to Huawei. Broadcom previously estimated full-year revenue of $24.5 billion. The research firm IHS Markit said Micron and Western Digital will also suffer, as they lose a leading buyer of memory chips and storage devices.

By Dake Kang and Yanan Wang, AP, 17 June 2019

Read more at the Associated Press

Photo: Christine und Hagen Graf [CC BY 2.0], via Wikimedia Commons

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