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Huawei says US sanctions will reduce revenue by $ 30 billion



Huawei can feel rooted in the US efforts to rebuild the Chinese telecommunications giant.

In April, Huawei reported a 39 percent increase in revenue in the first quarter despite US efforts to deter allies from doing business with the company. But the company now expects revenues to fall to $ 100 billion this year from $ 107 billion last year, said founder and CEO Ren Zhengfei during an event Monday.

Ren accused the US decision to add Huawei to a list of companies that are essentially banned from buying US technology, including software and microchips that the company uses to build its smartphones and infrastructure equipment. The bans will cost Huawei about $ 30 billion in revenue this year and next, Ren said through a translator in a livestreamed discussion that also included US investor and author George Gilder and MIT Media Lab founder and early WIRED investor Nicholas Negroponte. He also confirmed a Bloomberg report that Huawei's phone sales abroad fell 40 percent over the past month.

Ren said he was surprised at the severity of the American actions and that Huawei will raise the use of his own chips and technologies over the next two years. But he still wants Huawei to use US technology, if possible. He stressed that he did not owe American companies for Huawei's situation, but American politicians. "We're not afraid to work with US components, we're not afraid to use US elements," he says. But he says other non-US companies may be more cautious about using US technology in the future for fear of being cut off from suppliers.

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Gilder and Negroponte called the United States restrictions on Huawei a mistake. "My interest is open information, open science," Negroponte said. "We value knowledge, we will build on the people before. The only way this works is if people are open at the beginning and we can all build on one another."

Asked how censorship in China affects open exchange of information between China and other countries, Negroponte said that "China must change" and allow companies like Google to offer services in the country. Ren did not answer the question.

American companies also feel the sting of the restrictions on selling to Huawei. According to Huawei, the company spent about $ 1

1 billion on US technologies last year. Chipmaker Broadcom expects Huawei constraints to reduce revenue this year by 2 billion. Dollars, says the company last week. According to Reuters, other chipmakers lobby the White House lobby to loosen the restrictions. US companies do not have that kind of access to the Chinese market they want. But losing access to Huawei means even fewer sales to the country.


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