Huawei’s revenue has fallen the most since it was blacklisted by the U.S.

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Huawei Technology Update

After the United States imposed sanctions on its global smartphone sales, Chinese technology giant Huawei suffered its biggest revenue decline in history in the first half of this year.

Chairman Eric Xu said that surviving under American pressure is Huawei’s top priority because it tries to “turn to software” to increase its resilience through diversification.

“We have set a strategic goal for the next five years. Our goal is to survive and survive sustainably,” Xu said in a statement.

Since Washington first included Huawei on its trade blacklist in 2019, it has gradually tightened the screws on the grounds of national security issues. Suppliers using any American technology to manufacture parts for Huawei must first obtain approval from Washington, which has actually killed the supply of several key parts.

The Chinese technology giant’s revenue in the first half of the year was RMB 320.4 billion (US$49.5 billion), a decrease of 29.4% from the same period last year.

The revenue of its consumer electronics division fell by nearly 47% from a year ago, or more than 120 billion yuan, because the company was unable to sell its mobile phones because of the lack of access to key US chips.

“We are definitely affected by the shortage of chips… and the US sanctions,” a Huawei spokesperson said, adding that the sale of the company’s honorable smartphone brand has also led to a downturn in the consumer electronics sector.

Huawei’s key business of selling infrastructure equipment to telecom operators also declined, down 14.2% to RMB 136.9 billion.

Corporate business, including digital solutions for smart cities, finance, transportation, energy, manufacturing, and education, was the only growth component, achieving sales of 42.9 billion yuan, an increase of 18.2% over the previous year.

In the face of pressure from the United States, Huawei’s top priority is to maintain resilience. One obvious area is what CEO Ren Zhengfei calls “turn to software”, including supporting its fast-growing cloud computing business.

“We must dare to lead the world in pure software,” Ren Zhengfei said in a statement. “In areas where software and hardware overlap, we should focus on optimizing software to complement hardware,” he added.

The focus on software includes the Hongmeng system that Huawei uses to replace Google’s Android system. Since June, it has installed the Hongmeng operating system on approximately 50 million smartphones and other devices.

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