Sanctioned Huawei keeps on losing money, just not as quickly

midian182

Posts: 8,171   +97
Staff member
In context: It's been over three years since the Donald Trump administration placed Chinese tech firm Huawei on an export blacklist, and the company continues to feel the impact as revenue fell again in the first half of 2022. The one bit of good news for Huawei is that the speed of its decline has slowed slightly as it broadens the scope of its business.

As per the SCMP, Huawei reported revenue of 301.6 billion yuan, or around $44.7 billion, for the first half of 2022, marking a 5.9% year-on-year drop. That's an improvement over the first quarter results, which saw revenue down 13.9% YoY. Its profit margin declined to 5%, dropping by almost half compared to H1 2021. Huawei said the results are "in line with forecasts."

In the middle of May 2019, with US-China trade war tensions rising, Donald Trump declared a national emergency that effectively banned US companies from buying and using telecoms equipment from "foreign adversaries." Following the announcement of the order, the Commerce Department revealed that Huawei and 70 affiliates had been added to the Bureau of Industry and Security (BIS) Entity List.

Being unable to access American-made technology or deal with companies that use US tools or designs, including TSMC, was a massive blow to a firm that was once the world's largest smartphone vendor. It can't even ship handsets with Android or Google's suite of apps pre-installed anymore. As such, the company's consumer division, which covers smartphones, saw revenue dip 25% YoY.

Huawei recorded its first-ever quarterly revenue decline in Q4 2020 and was forced to sell its Honor division so the budget phone maker could avoid the sanctions. This was soon followed by the company's largest ever revenue drop.

Huawei's share of the smartphone market in both China and the rest of the world continues to shrink, though its enterprise business, which covers cloud computing, software, and other services, did experience revenue growth, rising 28%.

"While our device business was heavily impacted, our ICT [information and communications technology] infrastructure business maintained steady growth," Ken Hu, Huawei's rotating chairman, said in a statement.

Huawei has also been expanding into other areas, from the more traditional wearables and smart cars to less familiar industries, such as coal mining and pig farming.

Masthead: Karlis Dambrans; center image by Yuangeng Zhang

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psycros

Posts: 4,352   +6,384
The real question is why haven't ALL Chinese-run tech companies been banned? They've all built their businesses on stolen western technology. Is it a matter of having more oversight from on-site executives from their biggest customers? We know Apple has people embedded at all their major Chinese partners, including the ones sub-contracted by Samsung.
 

p51d007

Posts: 3,315   +2,923
The real question is why haven't ALL Chinese-run tech companies been banned? They've all built their businesses on stolen western technology. Is it a matter of having more oversight from on-site executives from their biggest customers? We know Apple has people embedded at all their major Chinese partners, including the ones sub-contracted by Samsung.

Agree, but since the bulk of consumer electronics either comes from, or is built, then assembled elsewhere, China kind of has the consumer electronics market by the horns.
 

Watzupken

Posts: 671   +544
The real question is why haven't ALL Chinese-run tech companies been banned? They've all built their businesses on stolen western technology. Is it a matter of having more oversight from on-site executives from their biggest customers? We know Apple has people embedded at all their major Chinese partners, including the ones sub-contracted by Samsung.
There is a difference between anti competitive behaviour vs sanction based on national interest. If you are trigger happy and imposing a blanket sanction, you need clear evidence that it’s not anti competition driven. As far as I can tell, “resourceful” US have by now claimed for many years that Huawei is spying on them, but not able to show any proof. Yet ironically, if you remember Edward Snowden that famously called out US’ surveillance (nice way to call spying), I don’t see they are any better. The truth is, every nation will try and keep tab on others through whatever methods that’s available to them. In modern context, by call out China is spying is like saying that the sun will set each day.
 

eforce

Posts: 1,028   +1,484
If the true aim of environmental regulation and treaties was actually the health of the global environment, the biggest polluter nations and sources would not be given a free pass.
And all the proponents of such regulations/treaties wouldn't live lavish lifestyles and jet around everywhere in private jets.
 

Endymio

Posts: 1,827   +1,895
As far as I can tell, “resourceful” US have by now claimed for many years that Huawei is spying on them, but not able to show any proof.
There's plenty of proof of Huawei's spying. Here's just one:

"...evidence contradicting Huawei’s cyber-espionage denials has been mounting for a while. In 2018, France’s Le Monde reported that IT department staff at the African Union’s headquarters in Addis Ababa, Ethiopia, found data transfers on its servers had been peaking after hours from January 2012 to January 2017. On further investigation, they discovered that the AU’s internal data was being stored on unknown servers hosted in Shanghai. Huawei had installed the system and remained the AU’s key information and communications technology provider. It asserted it was unaware of the data transmission, but experts questioned how a breach so large could go unnoticed for 1,825 days in a row. Two years later, senior security officials in Uganda and Zambia told the Wall Street Journal that Huawei technicians played a direct role in helping their governments spy on political opponents..."

The truth is, every nation will try and keep tab on others
Sure. The difference is that the US and European nations don't keep millions of their own citizens in slave-labor genocidal death-camps.