Huawei think the United States will reduce their revenue by more than 10 billion dollars

By Sijia Jiang and Brenda Goh

HONG KONG / SHANGHAI (Reuters) – Chinese tech giant Huawei said on Friday that the impact of US trade restrictions on its business would be lower than its initial fears, although restrictions could drive down its unit's revenue. smartphone about $ 10 billion this year.

Huawei Technologies' $ 100 billion business has been hit hard since mid-May, after Washington ranked the world's second-largest maker of smartphones in a list of entities that threatens to shut it down. access to essential components and technologies in the United States.

In its first assessment of the impact of the restrictions, Huawei's founder and CEO, Ren Zhengfei, said in June that the blacklist would affect the company's revenue by $ 30 billion, leaving it with no upward growth for 2019.

"It seems like it will be a little less than that, but you have to wait for our results in March," said Eric Xu, vice president of Huawei, at a press conference to present new chips. artificial intelligence at its headquarters in Shenzhen.

Huawei's consumer business group – which includes the smartphone industry and seeks to develop its own operating system in anticipation of the worst-case scenario of critical Google Android apps being removed – is doing well "better than what we initially feared, Xu said.

"But a reduction (sales) of more than $ 10 billion could take place," he said. Huawei 's mainstream business group said a turnover of 349 billion yuan in 2018.

Stimulated by promotions and patriotic buying, Huawei's smartphone sales in China jumped one-third from the previous year to a record high in June, offsetting the drop in deliveries to the world market. Huawei announced last month that the consumer group had achieved a turnover of 221 billion yuan in the first half of 2019.

In a temporary relief granted to Huawei, Washington announced this week that it would extend the 90-day suspension allowing Huawei to buy from US companies in order to provide existing customers, while adding more than 40 Huawei units to its economic blacklist.

Xu said the stay was meaningless for Huawei, whose employees are "perfectly prepared" to live and work with the ban.

Huawei, which has developed its own chips to reduce its reliance on foreign technologies, repeated Friday that its chips, including a new chipset for AI that it launched on Friday, said the company has been working on the chips. Ascend 910, are for own use and do not aim to become a chip seller.

"We are open to discussing partnerships with AI chipset development companies, so that different types of chips could be used in Huawei products." The positioning of our chip business as an autonomous entity is so a scenario that will not happen, "said Xu.

The Ascend 910 AI processor, a 7-nanometer chipset designed by HiSilicon, a semiconductor unit based on the ARM architecture for training AI models, has more computing power than any other AI chipset in the world. world, said Xu.

UK chip maker ARM announced earlier this year that it was terminating the deals with Huawei, laying a heavy blow on Huawei, but Xu said that Huawei's perpetual ownership of the ARMv8 license meant that the chipset Ascend 910 would not be affected.

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(Report by Sijia Jiang and Brenda Goh, Miyoung Kim's writing, Muralikumar Anantharaman's edition)