generated sales growth in the first quarter of 2020 despite the U.S. trade embargo and the COVID-19 pandemic. Compared to the same period last year, revenues improved by 1.4 percent to CNI 182 billion (EUR 56.89 billion). However, growth was significantly lower than in the previous year: In 2019, Huawei’s sales increased by 23.2 percent in the first half of the year.
In the consumer segment, which includes smartphones, tablets and notebooks, Huawei increased sales by almost 16 percent from CNY 220.8 billion to CNY 255.8 billion. With a share of 56 percent, business with smartphones is the most important source of sales. Carrier business grew just under 9 percent from CNY 146.5 billion to CNY 159.6 billion, accounting for 35 percent of sales. Enterprise revenue grew nearly 15 percent from CNY 31.6 billion to CNY 36.3 billion. This division has an eight percent share of total sales.
Tightening of sanctions
Since the USA has recently tightened sanctions against Huawei and the Chinese group of semiconductor manufacturers such as TSMC, which uses US technology for the production of chips, is no longer allowed to purchase products after a transition period of 120 days, the Chinese group’s business prospects are more than over uncertain.
Huawei said the following about the new sanctions: “We expect our business to be inevitably affected. We will do everything we can to find solutions. We hope that our customers and suppliers will continue to stand with us and minimize the impact of this discriminatory rule. ”
The loss of TSMC as a chip producer weighs heavily since no Chinese semiconductor manufacturer can match the Taiwanese manufacturer’s performance. It currently manufactures semiconductors using the 7-nanometer process and plans to switch to 5 nm in the course of the year. TSMC has already announced the development of 3 nanometer manufacturing technology. Meanwhile, the leading semiconductor manufacturer in China, SMIC, can only produce chips using the outdated 14-nanometer process.
Background: Huawei in the trade conflict
In the trade dispute between the United States and China, the Chinese electronics company has become the target of sanctions. The US argues that using Huawei devices could give the Chinese state access to data through a back door. Huawei has always denied this possibility and refers to numerous certification of its devices. No other manufacturer has received more certifications than Huawei. So far, the United States has not provided any evidence to support its claims. On the contrary: An investigation carried out by the US government in 2012 revealed no evidence of back doors.
In an interview with the Financial Times, Huawei founder Ren Zhengfei said the following about the existence of back doors in Huawei products: “We will never do this. If I had done it once, the United States would have evidence to spread around the world. Then the 170 countries and regions in which we currently operate would stop buying our products and our company would collapse. After that, who would pay the debts we have? Our employees are all very competent, so that they would quit and start their own business, so that I could pay our debts alone. I would rather die.”
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