Huawei’s founder and chief executive, Ren Zhengfei, has spoken publicly for the first time since President Donald Trump’s US trade blacklist hit the company.

By Ian Horswill

Posted on June 18, 2019

Donald Trump’s US trade blacklist will cost Huawei US$30 billion over the next two years, says the China company’s founder and chief executive, Ren Zhengfei.

It was the first time Ren Zhengfei has spoken publicly since Huawei, the world’s largest maker of networking equipment and the second biggest manufacturer of smartphones, was hit by the Trump administration restricting the ability of suppliers to sell it American technology. Huawei made US$11 billion worth of US technology last year out of a total manufacturing budget of US$70 billion.

“We did not expect that the US would attack us with such determination and on such a large scale,” Ren Zhengfei said during ‘A coffee with Ren’, featuring American technologists, investor George Gilder and former Massachusetts Institute of Technology professor Nicholas Negroponte, at Huawei’s headquarters in Shenzhen, China.

“We made some preparations, such as for the core business part, but we have been unable to protect some of the secondary parts [of our business].”

Speaking in a slightly softer tone than his usual direct style, Ren nevertheless remained upbeat about Huawei’s long-term future.

“After all this, we will become even stronger,” he said. “We are the birds that will never die.”

Huawei has been hard hit by the Trump administration’s trade blacklist and opposition to its 5G network

In March, Huawei reported a 19.5% jump in annual revenue to 721.2 billion yuan (US$107.1 billion) in 2018, a year in which it came under siege as the US government sought to block use of the company’s 5G technology in mobile networks around the world.

Edison Lee, a Hong Kong-based telecom analyst at Jefferies, said Ren’s revenue forecast “sends a dangerous signal” to the supply chain for communications gear, adding in a research note that he expects the loss of Android licenses to cost Huawei the bulk of its overseas smartphone sales, the Wall Street Journal reported.

“Huawei lowering its growth target will have an impact on the overall devices market and ICT [information and communications technology] industry,” Cao Zhongxiong, executive director of New Economy studies at Shenzhen-based think tank China Development Institute, told the South China Morning Post. “In the past two years, Huawei has been able to push ahead even though the global smartphone market has been in a downward trend …. now the future remains unclear.”

At Coffee with Ren, Ren emphasised that Huawei will not stop collaborating with other countries and businesses.

The company’s current situation “is not caused by American businesses, but rather by certain politicians’ different perspectives,” Ren said. “I think both sides will suffer. No one will win.

“[Huawei] will see new life in 2021. [But] we will have a lot of versions to switch, and it will take time,” he added, without elaborating.