Huawei Sees Rise in Sales in 2020 Even as US Sanctions Against the Company Take Effect

By Thomas Price Wednesday, March 31, 2021

As trade tensions between China and the United States (US) continue to make major waves for the companies that do business internationally, tech company Huawei still managed to find success in 2020. The company recently reported on the fiscal year and how, in spite of the ongoing sanctions from the US, business continued to grow, albeit at a much slower rate. While sales did continue to rise, the extremely decreased growth rate leaves the future of the tech company still up in the air.

A person using Google on a Huawei phone.

Huawei’s 2020 Fiscal Year

Over the course of 2020, Chinese tech company Huawei generated $135.8 billion in total sales. This is largely off the back of the success of their smartphone business and the growing popularity and effectiveness of their 5G network gear. While this sales figure does represent a 3.8% growth from the company, the rate of growth took a major dive. In 2019, Huawei grew by 19.1%, leaving expectations sky-high before the US sanctions crippled their ongoing business expansion in international markets.

Another concerning aspect of 2020’s growth numbers for Huawei is how concentrated the areas of growth are. In fact, the 3.8% is built largely on the back of the 15.4% growth in China alone. Nearly all other major markets for the tech company saw sales shrink over the course of the year. China is now responsible for 65% of total business for Huawei, suggesting that the short-lived international impact is dwindling.

In fact, before the onset of sanctions from the US, Huawei stood as the second-largest smartphone company by market share. However, since then, the business has fallen out of the top five, suggesting how impactful those sanctions are turning out to be.

Impact and Details of US Sanctions

The US blacklisted American tech companies from exporting specific technologies to Huawei by placing the Chinese business on the Entity List back in 2019. However, since this event, several other restrictions and business moves took place to further damage Huawei’s presence in the US. Tech giant Google ended up cutting ties to Huawei, forcing the company to find a new operating system to run their smartphones now that Android was no longer available. Most recently, the US added to their sanctions of Huawei by cutting off the company from purchasing semiconductor chip supplies from American companies.

These moves have virtually iced Huawei out of any kind of meaningful business in the US or really North America as a whole. Considering what a major region North America is for tech and smartphone companies, this serves as a huge blow to Huawei who was quickly gaining momentum before the onset of the sanctions.

While this all appears dire for Huawei, it may not necessarily be the case. Obviously, international business from the company will suffer as a result. However, with plans to refocus on the domestic Chinese market, the company can still thrive in the near future, given how large the Chinese consumer base is. Expansion into new ventures such as cloud computing could also be incredibly lucrative for Huawei, especially as remote work continues to be the norm for many jobs even after the end of the COVID-19 pandemic.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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