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While the firm 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. ($49.57
billion)
Xu said his "biggest hope" for the company is that it will still
exist in five to ten years.
China's efforts to develop its semiconductor industry have shown
"quite encouraging results", Xu said, but addressing Huawei's
supply chain challenges will take a long time.
NEW GROWTH AREAS
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. [L1N2QP2MO]
The company 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.
Reuters reported in August that the Tianjin State-owned Assets
Supervision and Administration Commission (SASAC), which
oversees local government-backed companies, has asked
municipally controlled companies to migrate their data from
private sector operators to a state-backed cloud system by next
year.
When asked about the establishment of a China state-run cloud
and how the Tianjin SASAC's plan would affect Huawei, Xu said
that Huawei was examining its position as a potential service
provider.
He also pointed out that the move was not coming from the state
government or Tianjin local government without elaborating
further.
He added that he believed an idea of setting up a separate cloud
infrastructure would have likely arisen because existing cloud
service providers are not doing a good enough job to assure
users that they can put their data on their systems.
($1 = 6.4636 Chinese yuan)
(Reporting by David Kirton; Editing by Kirsten Donovan and Ana
Nicolaci da Costa)
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