Huawei has a plan to survive US sanctions against it. In the immediate future, the Chinese group will focus on increasing its profits and will postpone its plans for expansion in the world until the Greek calendar. At the same time, Huawei will invest in its own production lines in order to manufacture its products without outside help.
Deprived of an Android license and banned from the American market since May 2019, Huawei will be relegated to 7th place in the smartphone market in the world from 2021. Cornered by American sanctions, the Chinese group should only sell 45 million 5G terminals in the world, down 73% compared to 2020. In response, Huawei has resolved to sell its subsidiary Honor to a Chinese consortium.
Despite the frenzied assaults from the United States, Huawei has not said its last word. In order to survive the restrictions, Ren Zhengfei, CEO and founder of the group, has implemented a series of measures. Asked by the South China Morning Post (SCMP), the 76-year-old businessman explained the battery of measures that have come into force to ensure the sustainability of Huawei. Delivered last June, this interview was not made public by Huawei until January 22, 2021.
Huawei will invest in its production lines
First of all, Huawei temporarily gives up its international ambitions. Before the sanctions, the Chinese group aimed to market its products on all markets in the world, including the USA. Second, the builder is forced toinvest quickly in its own production lines. “There is a big mismatch between our capacity and our strategy. This is our weak link, and we are forced to start from the start as elementary school students ” regrets Ren Zhengfei. The Trump decree has in fact deprived Huawei of a significant portion of its suppliers, including TSMC.
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“Please don’t be upset by the temporary pressure from the United States and don’t give up on our strategy of globalization. There is no future without embracing globalization ” continues the founder. Ultimately, Huawei will therefore return to assault markets where it is not present, such as the United States.
For now, Huawei must focus on its profits. “We have to gradually move from the top row to the bottom row. All product lines must not blindly continue to become No. 1 because we do not have the conditions to be No. 1. We must create value and reasonable profits to ensure healthy growth ” advises the manager. In the process, Ren Zhengfei announced the freeze on the salaries of all employees of the group for the next three to five years.