Q3 Growth Slows to 3% Range
US Sanctions Intensify
[Asia Economy Reporter Koo Chae-eun] As the U.S. government continues its stringent sanctions, including supply disruptions from Google and TSMC, the performance of Chinese telecommunications equipment company Huawei is slowing down. With a 3.7% increase in sales growth in the third quarter of this year, the "Huawei crisis theory" is emerging.
On the 23rd (local time), CNBC reported that Huawei announced in its earnings report that third-quarter sales reached 217.3 billion yuan (36.9 trillion KRW), a 3.7% increase compared to 209.5 billion yuan in the same period last year. This marks a significant narrowing from the double-digit sales growth seen earlier this year. Huawei's sales from January to September this year were 671.3 billion yuan (approximately 114 trillion KRW), up 9.9% from 610.8 billion yuan in the same period last year. Compared to the consistent growth rate of over 20%, this is a noticeable stagnation.
Experts believe that the U.S. export restrictions and the slowdown in growth caused by the spread of the novel coronavirus (COVID-19) have impacted Huawei's performance. However, since Huawei has not disclosed detailed breakdowns of its earnings, it is unclear which business segments drove the sales increase. In a press release, Huawei stated, "As the world struggles with COVID-19, Huawei's global supply chain has been under severe pressure. Difficulties in production and operations have increased."
Meanwhile, last year, Huawei was placed on the U.S. Department of Commerce's blacklist of restricted trading companies, cutting off transactions with major suppliers and leaving it isolated. As the Chinese government retaliates, the U.S.-China ICT hegemony war is accelerating.
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