Huawei Forecasts $30 Billion Revenue Drop Amid Intense US Trade Restrictions
Huawei expects to lose $30 billion in revenue over the next two years due to strict U.S. trade restrictions that limit access to American chips and software.
Huawei expects its revenues to fall $30 billion below previous forecasts over the next two years as a direct result of escalating U.S. trade restrictions. Founder and CEO Ren Zhengfei reveals that production slows significantly this year, with overall revenue hovering around $100 billion and overseas smartphone shipments dropping by an estimated 40 percent.
The financial hit stems from the U.S. "entity list," which bars the Chinese tech giant from purchasing components from American chipmakers and utilizing key Android services. Despite the severity of these bans, Ren notes that Huawei prepares for this scenario by developing its own backup chips and an alternative smartphone operating system.
Ren compares the company to a damaged airplane that protects its heart and fuel tank, assuring observers that Huawei experiences a temporary adjustment period rather than a permanent decline. This resilient attitude permeates the Huawei campus, where employees express strong confidence in the company's ability to rejuvenate its output by 2021 and grow stronger through the adversity.