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With Fading Of US Sanctions On It, China's Huawei Expects 'Business As Usual'

With Fading Of US Sanctions On It, China's Huawei Expects 'Business As Usual'
Huawei Technologies Co Ltd estimated on Friday that its 2022 revenue would remain flat, implying that the sales decline caused by US sanctions had ceased.
Despite a 0.02% increase in sales, rotating chairman Eric Xu was upbeat in the company's annual New Year's letter, where he revealed the figure.
"U.S. restrictions are now our new normal, and we're back to business as usual," Xu wrote in the letter that was addressed to staff and released to media.
According to Xu, sales revenue for the year is expected to be 636.9 billion yuan ($91.53 billion).
That is a marginal increase from 2021, when revenue was 636.8 billion yuan, and represents a 30% year-on-year sales drop as US sanctions against the company went into effect.
The profitability of Huawei was not mentioned in Xu's letter. The company typically releases its full annual results in the first quarter of the following year.
Revenue for 2022 is expected to be significantly lower than the company's record of $122 billion in 2019. At the time, the company was the world's leading vendor of Android smartphones.
The Trump administration imposed a trade ban on Huawei in 2019, citing national security concerns, which barred the company from using Alphabet Inc's Android for its new smartphones, as well as other critical U.S.-origin technologies.
The sanctions caused a drop in handset device sales. It also lost access to critical components, preventing it from designing its HiSilicon chip division's line of processors for smartphones.
The company's networking equipment division, which competes with Nokia and Ericsson, continues to generate revenue. It also has a division dedicated to cloud computing.
Around the time the sanctions went into effect, the company began investing in the electric vehicle (EV) sector as well as green technologies.
"The macro environment may be rife with uncertainty, but what we can be certain about is that digitisation and decarbonisation are the way forward, and they're where future opportunities lie," said Xu in the letter.

Christopher J. Mitchell

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