Huawei facing 'significant challenges' after US trade restrictions
Huawei's global supply chain is being put 'under intense pressure'
Chinese tech giant Huawei announced in its latest earnings report on Friday that its "production and operations face significant challenges" this year.
The results, which show slowed growth in 2020, come after the company faced a tough year of U.S. trade restrictions and subsequent deterrence from other countries like the U.K. and, more recently, Sweden, based on security concerns.
"As the world grapples with COVID-19, Huawei's global supply chain is being put under intense pressure, and its production and operations face significant challenges," a blog post announcing Huawei's earnings reads. "The company continues to do its best to find solutions, survive and forge forward, and fulfill its obligations to customers and suppliers."
Mobile network phone masts are visible in front of St Paul's Cathedral in the City of London, Tuesday, Jan. 28, 2020. (AP Photo/Alastair Grant)
The tech company reported a 9.9% increase in revenue and a net profit margin of 8%, which represents a drop from the same period last year, when Huawei announced a 24.4% increase in revenue and an 8.7% profit margin, as tech news website TechCrunch first reported.
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Huawei did not mention U.S. or other foreign trade restrictions in its report but did say the company "believes that rapid and healthy development within the .... industry will rely on open collaboration and mutual trust across the global industry."
The company is struggling with U.S. sanctions that cut off its access to most American components in a feud with Beijing over technology and security. The White House has said Huawei is a threat and might facilitate Chinese spying, which the company denies.
"The new rule makes it clear that any use of American software or American fabrication equipment to produce things for Huawei is banned and requires a license," Commerce Secretary Wilbur Ross told FOX Business' "Mornings with Maria" in August.
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Chairman Guo Ping said on Wednesday at the annual Huawei Connect event in Shanghai that its supply chain has been "attacked."
Chinese tech giant Huawei was placed on a blacklist by the U.S. (Associated Press)
Washington also is tightening curbs on access to U.S. markets or technology for other Chinese tech companies, including telecom equipment maker ZTE Corp., video service TikTok and messaging app WeChat.
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The conflict has fueled fears the global market might be dividing into competing U.S. and Chinese technology spheres with incompatible standards. Industry analysts warn that would slow down innovation and raise costs.
Executives have warned Huawei’s smartphone and network equipment sales would be affected. The company has launched smartphones ‒ including its latest smartphone, the Mate 40 ‒ based on its own chips and other components and said it is removing U.S. technology from its products.
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The Associated Press contributed to this report.