US export ban ‘won’t have a huge impact’ on Huawei, says founder

An export ban recently imposed by the U.S. government on Huawei will not have a huge impact in the company’s capacity to serve customers, Huawei’s founder Ren Zhengfei said during an interview with Chinese media.

“We will certainly be able to continue serving our customers. Our mass production capacity is huge, and adding Huawei to the Entity List won’t have a huge impact on us. We are making progress in bidding worldwide,” the executive said.

The executive said Huawei’s growth would experience a slowdown as a consequence of the ban but highlighted that the slowdown would be limited.

“Our growth will slow down, though not by as much as everyone imagine. In the first quarter of this year, our revenue grew 39% over the same period last year. This rate decreased to 25% in April, and may continue decreasing towards the end of this year. But the U.S. ban will not lead to negative growth or harm the development of our industry,” he said.

The Trump administration recently confirmed that the U.S. Department of Commerce had added Huawei to its Entity List, a decision that effectively banned the company from buying parts and components from U.S. companies without U.S. government approval. Under the order, Huawei will need a U.S. government license to buy components from U.S. suppliers.

However, earlier this week, the administration announced that it would ease certain export restrictions recently imposed on Chinese vendor Huawei Technologies, in a move to give operators time to make other arrangements, the entity said in a release.

The BIS said it would issue a Temporary General License (TGL) amending the Export Administration Regulations (EAR) to authorize “specific, limited engagement” in transactions involving the export, reexport, and transfer of items to Huawei Technologies and its sixty-eight non-U.S. affiliates.

Also, as a consequence of the ban, Google decided to suspend the transfer of hardware, software and technical services to Chinese vendor Huawei following a recent order by the U.S. government to put Huawei in an export blacklist. The U.S. giant said that it will only continue offering those services publicly available via open source licensing.

“Google is a good company – a highly responsible company. They are also trying to persuade the US government to solve this problem. We’re now discussing viable solutions for this, and our experts are still working on this,” Ren said.

Ren also said that Huawei is interested in continue to buy U.S. chips, despite having developed its own chips.

“We are always in need of U.S. chips. Our U.S. partners are fulfilling their responsibilities and asking for approval from Washington. If this approval is granted, we will still buy chips from these suppliers,” he said.  “Even if there is an insufficient supply from our partners, we will face no problems. This is because we can manufacture all the high-end chips we need ourselves. In the ‘peaceful period’, we adopted a ‘1+1’ policy – half of our chips come from U.S. companies and half from Huawei. Despite the much lower costs of our own chips, I would still buy higher-priced chips from the U.S.,” he added.

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