Thu, Mar 28, 2019 page11

• Huawei sees little effect on sales from US barrage

  BUSINESS AS USUAL: Rotating chairman Eric Xu said that revenue jumped 36 percent in the first two months of this year, despite global scrutiny over spying concerns

  • Reuters, SHENZHEN and HONG KONG
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  The US campaign against China’s Huawei Technologies Co (華為) is having little impact on the company’s sales and it is unlikely that many countries will follow the US in banning Huawei from building next-generation mobile networks, its rotating chairman Eric Xu (徐勇) said.

  “Recently we are seeing a large number of countries making their own decisions,” Xu said during an interview at Huawei’s headquarters in Shenzhen.

  While Australia has banned Huawei from 5G networks over security concerns, EU countries such as Germany and France have indicated they are likely to ignore the US call to shut out the telecoms giant.

  

  An attendee takes a photograph during a Huawei Technologies Co launch event in Paris on Tuesday.

  Photo: Bloomberg

  “Maybe it’s only Australia,” Xu told reporters after a tour of the campus.

  Xu said that Huawei’s revenue jumped 36 percent in the first two months of this year and was set for a 15 percent annual spike to US$125 billion, underlining strength in its smartphone business and sales of computing and communications networks.

  Huawei has been facing mounting scrutiny, led by the US, amid worries that its equipment could be used by Beijing for spying.

  However, the company says that the concerns are unfounded.

  Xu said that he does not expect the US to intensify its attack on the company by barring sales of US components to Huawei, a move that almost put its compatriot ZTE Corp (中興) out of business last year before US President Donald Trump lifted the ban.

  Huawei is the world’s third-largest buyer of computer chips, many of which come from US companies, and a sales ban would be disruptive to the global technology industry, Xu said.

  Xu’s comments come at a time when Huawei has sued the US government over a law that restricts its market access.

  In Canada, lawyers for Huawei chief financial officer Meng Wanzhou (孟晚舟), the daughter of founder Ren Zhengfei (任正非), have sued the government over her arrest on Dec. 1 last year at the behest of the US.

  She was charged with bank and wire fraud, and breaching US sanctions against Iran.

  Huawei, a privately held firm that offers few details about its internal operations, has over the past few months offered media interviews and invited journalists to tour its facilities as part of a counter-attack against the allegations of spying.

  Reporters were invited on Monday to peruse files in Huawei’s “share registry room” where it keeps records on tens of thousands of employee shareholders.

  Its ownership structure shows the Chinese government has no stake in the firm and that its 74-year-old founder Ren owns just more than 1 percent of the company.

  Much of the global scrutiny of Huawei stems from Ren’s background with the Chinese People’s Liberation Army, where he was a civilian engineer for nearly a decade until his departure in 1983 after helping to build its communications network.

  Reporters also toured Huawei’s new campus in Dongguan, near Shenzhen, which features buildings modeled on European cities, including Paris and Heidelberg, connected by a special train imported from Switzerland.

  However, there was little activity on the campus, which is designed to house 18,000 workers, save a couple of black swans flitting about a lake.

  In contrast, another Huawei facility nearby bustled with workers assembling smartphones on automated production lines.

  Huawei’s growth is mainly being driven by its booming smartphone business and sales of computing and communications networks to government and business customers.

  Future growth would also come “primarily” from these, Xu said, with sales of equipment to telecom carriers growing at single digit rates.

  Huawei is the world’s top producer of telecoms equipment and second-biggest maker of smartphones.

  On Huawei’s semiconductor operations, HiSilicon (海思半導體), Xu said the unit produced more than US$7.5 billion worth of chips last year. That compares with an estimated US$21 billion of chips that Huawei acquired from outside vendors.

  HiSilicon produces chip designs for Huawei’s equipment mainly, with the manufacturing handled by so-called “foundry” companies such as Taiwan Semiconductor Manufacturing Co (台積電).

  It does sell chips to others for use in video cameras, television set-top boxes and some low-cost Internet-connected devices, Xu said.

  Huawei would report last year’s financial results at a press briefing tomorrow, which more than 100 journalists are expected to attend, far more than in past years.

  “The United States should take quite a lot of the credit for making advertisements for Huawei,” Xu said.
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