Huawei CEO and founder Ren Zhengfei has acknowledged the company's sales are suffering outside China due to the US sanctions as well as the spread of the coronavirus. However, in interviews with the Wall Street Journal and South China Morning Post, he said the company had quickly resumed production in China and was spending heavily on R&D to ensure it maintains its technological lead.
Ren said Huawei resumed some operations in China from 03 February, after losing little production time. This was supported by a government ruling that allowed some critical industries to restart early despite a broader work stoppage. More than 90 percent of its approximately 150,000 employees in China are back to work, though workers have cut overseas travel and increased their reliance on remote conferencing to carry on business.
"Over 20,000 scientists, experts and engineers worked overtime during the Lunar New Year holiday, because we’re racing to develop new [technologies]," Ren told the SCMP, referring to the work in progress as "something which will keep us ahead of global competition", without revealing further details.
The CEO said the company's survival would not be threatened by the US sanctions nor the pandemic, but "it’s questionable whether we can keep our leading position". As a result, it's stepped up R&D spending to over USD 20 billion this year from USD 15 billion in 2019. The investment is going in part towards reducing the company's reliance on US suppliers, many of whom have been blocked from selling to the company.
The coronavirus outbreak has caused the company to lower its financial targets for the year, Ren said, though the specifics won’t be clear until next month. Already, smartphone sales are falling outside of China, he said, although the decline has been offset by strong domestic sales and additional sales measures. Globally, Huawei is selling about 22 million units a month, a slight rise over last year’s pace.
The company previously said its revenue last year rose about 18 percent to USD 122 billion. Ren said Huawei also saw a jump in net profits. The company is due to report audited financial results for 2019 by the end of the month.
