China’s Huawei Technologies will see revenue from its smartphone business drop by at least $30-40 billion in 2021, Chairman Eric Xu said.
While Huawei has been getting used to U.S. sanctions imposed on it since 2019, its new 5G related business areas cannot offset the losses from the handset business, Xu, who is rotating chairman this year, said at a press conference in Beijing on Friday.
Former U.S. president Donald Trump put Huawei on an export blacklist in 2019 and barred it from accessing critical U.S.-origin technology, impeding its ability to design its own chips and source components from outside vendors.
The sanctions hit Huawei’s smartphone business particularly hard.
Once briefly the world’s biggest smartphone vendor, Huawei dropped out of the ranks of China’s top five sellers in the second quarter for the first time in more than seven years, according to research firm Canalys.
Smartphone still brought in around $50 billion in revenue last year, Xu said. Huawei reported its biggest ever revenue drop in the first half of 2021, generating 320.4 billion yuan or $49.57 billion.
The Biden administration has shown little inclination to reduce the pressure on Huawei so far, with U.S. Commerce Secretary Gina Raimondo telling Reuters on Thursday that it will take further steps against the company if needed.
Huawei has been looking for new areas of growth such as 5G and AI-based infrastructure upgrades to airports and mines. China will be a world leader in applying 5G technology in the next few years, Xu said.
The company is also exploring investments in areas that have nothing to do with the chipset supply chain, Xu said.