Huawei’s revenue plunged in the first quarter due to U.S. sanctions

Chinese telecommunications equipment giant Huawei has reported first-quarter 2021 results showing a sharp decline in the company’s operating income. Analysts say sanctions imposed by the United States continue to curb Huawei’s operations.

Huawei reported on Wednesday (April 28, 2021) that its revenue for the first quarter reached 152.2 billion yuan, down 16.5 percent from the same period last year, which it said was related to the sale of its “Honor” cell phone brand in November last year.

The company’s rotating chairman Xu Zhijun admitted that 2021 “remains a challenging year” for Huawei, saying the company will actively face the test and continue to work to solve the supply continuity problem under sanctions and continue to create business value for customers.

Then-President Donald Trump accused Huawei of cooperating with Beijing authorities to steal information from the U.S. and its allies through its communications products, and in 2019 ordered export controls on Huawei, prohibiting the company from acquiring key technologies from the U.S., thus undermining Huawei’s ability to design its own chips and obtain components from abroad. In addition, the Trump administration has worked to convince European and Asian allies not to use Huawei products in their own 5G mobile network upgrades.

The Biden administration, which took office in January, has continued many of the previous administration’s policies toward China. A senior official in the new administration said the U.S. would “make sure we don’t provide China with high-end sensitive technology that allows China to enhance its military capabilities.” He also said the Biden administration would consider consulting with allies to impose “new targeted restrictions” on technology exports to China.

Huawei remains a major player in China’s vast domestic market, but continues to experience setbacks in international markets. The company’s 2020 revenue fell 12 percent in Europe, the Middle East and Africa, nearly 9 percent in Asia outside of China and a steeper drop of nearly 25 percent in the Americas.

Last month, Huawei Chairman Xu Zhijun said Huawei is investing heavily in areas that rely less on U.S. chip technology, such as self-driving technology and cloud-based computing.