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Huawei crackdown

Huawei's 5G business 'unaffected' by US sanctions: chairman

Hu touts 50 contracts in 30 countries and 'guarantees' future supply

While Huawei Technologies' 5G business is expected to be hit hard by U.S. sanctions, orders for its 5G base stations remain brisk.   © Reuters

SHANGHAI -- Huawei Technologies' 5G business has been "unaffected" by the Chinese company's inclusion on a U.S. trade blacklist, with orders for network equipment continuing to pour in, rotating Chairman Ken Hu told reporters here Wednesday.

Huawei has won 50 commercial contracts for fifth-generation wireless equipment in 30 countries besides China since it began taking orders last year, up from 30 at the end of February, Hu said at the MWC Shanghai industry conference here.

Of these, 28 are from European countries such as the U.K. and Spain, 11 from the Middle East and six from Asia-Pacific markets including South Korea.

The Chinese telecommunications equipment maker's total shipments of 5G base stations have more than tripled since February to over 150,000. Hu predicted the tally will "reach 500,000 by the end of 2019."

This growth comes despite U.S. warnings to other countries not to use Huawei and other Chinese-made gear in their 5G networks, claiming national security risks. But existing 4G infrastructure in much of Europe and Asia already incorporates Huawei equipment, and it is cheaper than competing devices from European rivals such as Ericsson and Nokia.

Washington in May essentially barred American companies from exporting technology to Huawei. This has dealt a heavy blow to the Chinese manufacturer's smartphone operations, which rely on Google's Android mobile operating system, among other U.S. parts and software. Huawei expects its global smartphone shipments to fall by 40 million units in 2019, equivalent to about 20% of last year's total.

The company expects the impact on its 5G operations to be far less drastic, according to Hu. Huawei is believed to be responding by diversifying its sourcing of parts and building up stockpiles.

"We can fully guarantee supply [of base stations] for contracts we have signed so far and contracts we will sign going forward," he said.

Hu also indicated that even with the sanctions, Huawei should have "no legal problem" continuing to buy from its Japanese suppliers. It does business with more than 100 Japanese companies, including Sony and Toshiba Memory.

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