Huawei doesn't expect US ban will harm development of its 5G industry

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(Image credit: Image credit: Huawei)

Huawei expects the US ban will not lead to negative growth or harm the development of its 5G industry despite reporting weaker revenues in April.

“Our growth will slow down, though not by as much as everyone imagines. In the first quarter of this year, our revenue grew 39% over the same period last year. This rate decreased to 25% in April, and may continue decreasing towards the end of this year,” Ren Zhengfei, Huawei founder, said in a statement.

Last week’s White House order is expected to disrupt Huawei’s global business by limiting access to components and software, after a 90-day grace period runs out on August 19.

“Our company will not end up with an extreme supply shortage...Even if there is an insufficient supply from our partners, we will face no problems. This is because we can manufacture all the high-end chips we need ourselves,” Ren said.

Mo Jia, research analyst at Canalys, said that Huawei has stocked more components prior to the executive order and, “in the short term,Huawei still has sufficient components, however, if Huawei failed to change the situation, it’s a matter of time that the production of its 5G equipment would be impacted,” he said.

According to industry reports, Huawei buys more than $11 billion in goods and services from US companies each year. The Chinese player will have to get government approval to buy parts or technology from US suppliers.

Huawei in a strong position to move ahead

Ren reiterated that the company is in a strong position to move ahead despite recent political actions in the US. Moreover, he said that most of the companies that provide consulting services to Huawei are based in the US, including dozens of companies like IBM and Accenture. 

“The US is a country ruled by law. US companies must abide by the laws, and so must the real economy. Our close relationships with US companies are the result of several decades of effort on both sides. These relationships won't be destroyed by a piece of paper from the US government,” he added.

As long as these companies can obtain approval from Washington, Ren said that Huawei will continue to buy in large volumes from them. 

“It may be the case that they cannot obtain approval quickly. We have ways to go through this transition period. Once approval is granted, we will maintain our normal trade with these US companies and work together to build an information society for humanity. We don't want to work alone,” he said.

“I don't know exactly what [those US] politicians are thinking. I think we should not be the target of US-led campaigns just because we are ahead of the US.” The Huawei founder said that Europe will not follow in the footsteps of the US, and the majority of US companies are communicating closely with us. 

“We will certainly be able to continue serving our customers. Our mass production capacity is huge, and adding Huawei to the Entity List won't have a huge impact on us. We are making progress in bidding worldwide,” Ren said.