Huawei Technologies saw slowed growth in 2020 due to the Covid-19 pandemic and being blacklisted by former U.S. President Donald Trump.
The privately held Chinese tech giant booked 64.6 billion yuan ($9.9 billion) in annual profit, up 3.2% from 2019, compared to growth of 5.6% in the preceding year. Revenue reached 891.4 billion yuan ($136.1 billion), at a 3.8% year-over-year increase.
Ken Hu, the rotating chairman at Huawei, said in a statement on its official website that the resurgence of Covid-19 and continued geopolitical challenges will continue to adversely impact the company’s business in 2021.
At home, the company saw a 15.4% revenue increase to 584.9 billion yuan in 2020, while overseas sales declined across the board. Huawei is now facing aggressive rivalry from Hong Kong-listed Xiaomi (OTC: XIACY; HKEX: 1810), which took a higher position in overseas markets in the fourth quarter. And while both giants are battling chip shortage, Xiaomi recently released several new models including a foldable phone and a higher-quality smartphone and is pushing ahead with plans like building a smart car while Huawei sold off its budget smartphone business in November 2020 to keep it afloat.
As China’s chip industry lags behind the top global semiconductor makers and Huawei is sanctioned from buying American technology, Huawei’s handset business has crippled. Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), a long-time partner of Huawei and supplier of Apple (Nasdaq: AAPL), stopped shipments to Huawei in September 2020 in exchange for continued growth in the U.S. including building a $35 billion Arizona Gigafab.
At an event at Huawei’s headquarters in Shenzhen, Hu said, as cited by Reuters, “In 2020 we saw a slowdown in the growth rate and life was not easy for us. The U.S. restrictions have impacted our consumer business, especially our mobile phone business.”
For now, however, Huawei has enough stockpiles to keep a leading market position, Hu added.