Huawei Technologies Company Ltd revenue slows due to US sanctions.
Huawei stated that the revenue growth of the company, slowed drastically in the 3rd quarter of the year 2020, because of US sanctions and also because of the New Coronavirus pandemic and this had disrupted its business.
The business of Huawei Technologies Company Ltd was impacted after Washington effectively blocked the Chinese company’s access to US-based software and equipment for chip manufacturing in May 2019, following similar measures that will come into effect gradually.
Huawei again reports growth figures for the first 9 months of this financial year, but these are lower since the US sanctions and due to measures by certain European governments and telcos, regarding 5G network purchases.
Sales rose around ten percent to about 85 billion euros (671.3 billion yuan). The net margin was 8 percent in the first nine months. No net profit figures have been issued. In the summer of 2020, the US government tightened its sanctions against Huawei Technologies Company Ltd, including on the purchase of chips.
Among other things, the US accuses Huawei of espionage, which the company firmly rejects. Under the regulation, chips designed using US software or manufactured using US technology, may no longer be supplied to Huawei.
Huawei Technologies Company Ltd would also like chip machines from ASML, but that has been stopped by the Dutch government, under American pressure. Huawei feels that because of the sanctions, the global supply chain has come under severe pressure, also due to the corona pandemic. Production and exploitation face major challenges.
The company’s net profit margin was eight percent for the first nine months of the year, compared to 8.7 percent in the same period last year.
Huawei did not disclose which parts of its business contributed to the growth in sales. Earlier this year, Huawei Technologies Company Ltd announced that its consumer business, which includes Smartphones, was responsible for almost all of the $ 12 billion decline in 2019 sales, compared to its own targets.
The Trump administration also threatened to prevent its main supplier, Taiwan Semiconductor Manufacturing Company, from providing supplies of semiconductors. This week, Huawei Technologies Company Ltd announced the launch of its latest flagship smartphone, which may be the last in the high-end Android segment that is most dependent on US technology.