Huawei founder Ren Zhengfei said today his company would cut back production for the coming two years in order to make changes to adapt to the US ban.
“In the coming year or two, the company will cut production and [the annual sales revenue will] drop by about USD 30 billion. That means the sales revenues for this year and next year will both be around USD 100 billion,” Ren said at a talk in Shenzhen that was live streamed on Monday afternoon.
Huawei’s revenue reached USD 107 billion in 2018, joining the USD 100 billion club for the first time. If Huawei’s sales revenue stays around USD 100 billion this year and next, it would mean the company could record a very rare flat or even negative growth.
“Huawei’s sales in the global mobile phone market has indeed dropped by 40%,” Ren said, confirming media reports earlier today which said the company’s overseas smartphone shipments had dropped between 40% to 60%.
Ren said even though his company had anticipated competition and conflicts arising along with its fast development, it had underestimated the US government’s determination to put hurdles in its path.
“We did not expect the scale of the US crackdown to be this big. Not only that [US suppliers] can’t supply us components, but also we can’t participate in many international organisations, we can’t cooperate with universities or use anything with parts of US origin,” he said. “We didn’t expect this to be so serious.”
But the difficulties the company was facing would not stop the company’s “pace of progress”, Ren told the audience.