The US sanctions imposed on Huawei severely dropped the company’s revenue. Recently, Huawei chairman Eric Xu said the company’s income decreased after he had pledged the imposed restrictions would not affect its sales and incomes.
“New 5G related business areas cannot offset the losses from the handset business,” Xu said. Notably, US former President Donald Trump cracked down on Huawei with sanctions in 2019. The sanctions cut Huawei from the US technology, especially from its state-of-the-art semiconductors, which are essential for smartphone production. As a result, the company may lose at least $30-40 billion of revenue received from smartphone sales. Such a huge amount is unlikely to be recouped in the next few years.
Huawei is planning to reduce its dependence on imported microchips as a countermeasure or refrain from manufacturing smartphones at all. According to Xu, the company has been looking for new areas of growth not related to semiconductors. For example, artificial intelligence and 5G technology.
In 2019, Donald Trump put Huawei on an export blacklist due to a suspicion of handing over personal data of US citizens to Chinese intelligence services. Notably, the US authorities removed some pressure from Huawei and approved the company's requests for the purchase of microchips for several hundred million dollars in total.
