Huawei Armed And Ready For Trump's Second Assault

2025-04-14 07:00:52

(MENAFN- Asia Times) Tech giant Huawei is better prepared for US President Donald Trump's second assault on China than it was for his first.

Rather than sanctions, the primary threat to the company's sales and profits now appears to be the possibility of a tariff-induced recession. More than 70% of Huawei's sales are now made in China.

Huawei's total sales are nearly back to their pre-sanctions peak, supported by a switch to domestic procurement. Its sales in the US are negligible, leaving almost no direct exposure to Trump's tariffs.

A large R&D budget has kept the company at the leading edge of the telecom equipment industry while supporting diversification into artificial intelligence (AI), cloud computing, autonomous driving and semiconductors. The balance sheet is sound.

Recall that, in May 2019, Trump banned US telecom carriers from using Huawei equipment and the Bureau of Industry and Security (BIS) of the US Department of Commerce put the company on its Entity List , preventing it from buying components and other products containing US technology without the department's approval.

Over the next two years, these restrictions were tightened to cut off supplies of advanced semiconductors, most importantly those made for the company by Taiwan's TSMC , the world's leading high-end chip maker.

Huawei also lost access to Google's Android operating system and Google apps, including Gmail and Google Maps. This caused Huawei's 5G cell phone business to collapse, resulting in a 29% overall decline in sales in 2021 and sharp drops in its profits before asset sales.

Huawei's share of the global cellphone market dropped from 18% in 2019 to about 2% in 2023 after the company sold its Honor budget brand to protect it from US sanctions.

But that was the bottom. Sales increased marginally in 2022, rose by nearly 10% in 2023 and jumped 22% in 2024, with sales of cellphones and other consumer products up 38%. Profits also increased in 2023 if sales of non-core businesses are excluded.

Sources: Huawei data; Chart by Asia Times.

The regional breakdown of Huawei's sales shows its rising dependence on the domestic Chinese market.

In 2019 , the year the company was put on America's Entity List, 59% of its sales were made in China, 24% in EMEA (Europe, Middle East & Africa), 8.2% in the Asia-Pacific, 6.1% in the Americas and 2.7% in other regions.

In 2024 , the breakdown was China 71.4%, EMEA 17.2%, Asia-Pacific 5%, the Americas (now mostly Latin America) 4.2%, and other regions 2.2%. Russia accounted for 15%-20% of EMEA sales.

Domestic sales increased by 30.5% supported by the digitalization of the Chinese economy and industrial automation.

Strong demand for new model smartphones, telecom networking equipment, cloud computing, data storage, digital power and connected cars with self-driving functions drove growth across all of the company's business segments.

Outside China, sales growth was highest in Russia, Saudi Arabia, the UAE, South Africa, Brazil and Indonesia.

MENAFN14042025000159011032ID1109426689

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.