Huawei Says 2021 Revenue is Expected to Drop 28.9%

On the last trading day of 2021, Huawei revealed some alarming news.

The company says it now expects 2021 revenue to drop by 28.9% as sanctions drag on. The company has suffered from U.S. sanctions, the semiconductor shortage and a decrease around the world in demand for smartphones.

The Chinese telecommunications giant said Friday it expects revenue for this year will come in at 634 billion yuan ($99 billion), a nearly 30% drop compared to a year ago.

The release on Friday was part of an internal New Year’s message from Huawei Rotating Chairman Guo Ping, who focused on rallying employees to press on.

The full-year estimate for 2021 indicates Huawei’s revenue for the second half of the year declined from that of the first six months to 313.6 billion yuan, from 320.4 billion yuan.

The company reported 891.4 billion yuan in revenue in 2020, up 3.8% from the previous year. This is compared to the 19.1% year-on-year increase reported for 2019, with revenue of 858.8 billion yuan.

The letter on Friday did not specify reasons for the drop in expected revenue, but noted “serious challenges” from “an unpredictable business environment, the politicization of technology, and a growing deglobalization movement,” according to an English-language version seen by CNBC.

Chairman Guo added that “this past year, our carrier business remained stable, our enterprise business experienced solid growth, and our device business expanded swiftly into new business domains.”

For 2022, Guo said the company’s aims include increasing efforts to build up and attract talent, and developing automotive-related technologies.

Last week, Huawei also announced the first electric car with its HarmonyOS operating system would likely begin deliveries in late February.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.