Five years ago, the US began a legal offensive against the Chinese technology giant Huawei that would prevent it from accessing American technology and Google services, leaving the company in a “fight for survival” after which it now declares “it is back.” “.
In January 2019, the United States accused Huawei of fraud and violating sanctions on Iran, which led weeks later to sanctions on the company for posing a risk to its national security, according to Washington.
The restrictions began to take their toll when Huawei had surpassed the American Apple and the South Korean Samsung to become the world leader in smartphone sales, in the second quarter of 2020.
Touched, but not sunk
The company, which is not listed on the stock exchange, closed 2020 with a 41% drop in sales, dropping to sixth place in global market share, and in 2021 its revenue suffered a year-on-year drop of 28.5%.
Furthermore, in 2020 it sold its low-cost device subsidiary, Honor, to a majority state consortium to “save the industrial chain” in the face of sanctions against the parent company.
However, according to Chinese consultancy TechOcean, the sanctions “did not affect Huawei’s core business”, given that phones were only “one of the legs”, one that “can have adverse effects when it constitutes a significant part of revenue.” due to “fluctuations” in said market.
In fact, telecommunications infrastructure continues to represent the majority of Huawei’s revenue and other “legs” such as cloud computing, intelligent vehicle solutions or artificial intelligence “continue to contribute to its growth.”
In China, where many Google services were already blocked, Huawei did not notice the effect of the sanctions as much – despite experiencing year-on-year sales declines in 2021 – and was ranked second in the local smartphone market at the end of 2023. .
The symbolic Mate 60 and the break with Android
In September, the launch of the Mate 60 phones generated great expectation in China as a symbol of Huawei’s recovery, something that caused stock out in some stores.
The Mate 60 uses a 7-nanometer chip manufactured by the largest Chinese semiconductor producer, SMIC, despite restrictions from the US, whose Government announced that it would investigate the alleged Chinese advance in this field.
In addition, Huawei announced that its operating system, HarmonyOS Next, will no longer be compatible with Android applications, marking its break with the Google system, which has been prohibited from selling products to the Chinese brand since 2019.
Huawei’s rotating chairman, Ken Hu, recently said the company “weathered the storm” and is “back,” announcing 2023 revenue rose 9% year-over-year to $99 billion.
The company thus regained optimism after a few years of decline in turnover and external “challenges”, in contrast to the attitude of 2020, when its priority was “to survive”.
“Through the work of our R&D, supply and other teams, we have made great progress in business continuity and technology leadership,” Hu noted.
Growing political profile
In 2021, Chinese media covered in detail the return to China of Meng Wanzhou, then Huawei’s chief financial officer and daughter of the company’s founder, after Canada released her as part of an agreement with US authorities to suspend judicial proceedings for fraud against her and coinciding with the release of Canadians Michael Spavor and Michael Kovrig, detained in apparent retaliation in China since 2018 for espionage.
State broadcaster CCTV live-streamed Meng’s landing after three years of house arrest, greeted by a red carpet and a crowd waving Chinese flags, while the official People’s Daily described her return as “a victory for the Chinese people.”
Likewise, since Chinese diplomacy was reactivated in 2023 after the ‘zero covid’ policy, the visit to Huawei offices has been part of the agenda of leaders from countries such as Argentina, Brazil or Algeria during their official trips to China.
Another exponent of this trend was recorded in September, when the Chinese president, Xi Jinping, gave his Venezuelan counterpart, Nicolás Maduro, a folding model of the brand, to which the Caribbean responded by praising the security of Huawei phones against American interventions.
The US and Europe remain hostile
Huawei mobile phones are banned in the US, but can be found on platforms such as Amazon or eBay; The operators also received a veto order, but some such as T-Mobile do provide service, although with difficulties, according to Internet users.
Regarding telecommunications equipment, the “Rip and replace” program subsidizes the “removal and replacement” of Chinese infrastructure such as Huawei’s, but operators criticize that the lack of financing forces them to leave rural areas disconnected.
Due to pressure from the US, the United Kingdom prohibited installing new Huawei equipment in the 5G network in 2020 and gave until 2027 to completely eliminate it from the infrastructure.
For its part, the European Commission considers that Huawei “presents higher risks than other suppliers” of the 5G network due to its alleged links with the Chinese Government, according to the latest 2023 report on the measures taken for the security of this technology, which have resulted in restrictions imposed by ten countries on Huawei or the Chinese ZTE participating in the deployment of their 5G network, actions that for Brussels “are justified.”
The company expressed its “firm opposition” and assured that Brussels’ conclusions “are not based on a transparent or objective judgment.”
Meanwhile, in Spain, the Government is awaiting publication of the list of high-risk suppliers, as stipulated in the 5G Cybersecurity Law, and whether or not it will include Huawei.