Huawei has claimed that the sustained US sanction regime that almost crippled it will ultimately benefit the Chinese chip industry. Huawei had come under a raft of sanctions by the United States government during the Donald Trump presidency. The sanctions regime has however continued with the Joe Biden administration. Huawei’s Chairman, Eric Xu, says that China’s chip industry will have a rebirth.

Huawei

Huawei lost its leading global position in the smartphone and telecommunications hardware market as a result of the US sanctions. The company also lost access to Google Play services, in addition to its inability to access US chip vendors. It has however risen stoutly to the debilitating challenges, developing its in-house operating system HarmonyOS and navigating expertly over the chip challenge. Huawei had the credible prospect of becoming the world’s number-one smartphone manufacturer before the sanctions hit it hard.

China is not allowed to purchase extreme ultraviolet (EUV) lithography machines for producing modern chips. Although SMIC is still developing its capability in China, Xu believes the future is bright for China-made chips. Such sanctions have expectedly pushed China into action, but it is unclear how long before it turns the corner.

Huawei reported a 69% dip in revenue in 2022, which was its biggest decline since 2011. Xu puts Huawei’s revenue setbacks as a result of a challenging external environment and non-market factors. The CEO however says Huawei has continued to forge ahead, doing everything to maintain business continuity and serve its customers.

Huawei hopes to benefit massively from China’s growth in chip-making capacity. This could help to further position the brand in its quest to rise to its pre-eminent position before the US sanctions kicked in in 2020.

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