Huawei Bounces Back: Regains Top Spot in China Amidst U.S. Sanctions

Huawei employees and founder Ren Zhengfei (front row, center) were unaffected by U.S. sanctions during the company’s heyday. Recently, the company is recovering its former glory by breaking through U.S. sanctions./Fengpai Xinwen..

Huawei, China’s largest telecommunications equipment company, which has been hit hard by U.S. semiconductor sanctions, is showing its enduring power through impressive recent performance. The impact of U.S. sanctions, which have been implemented with great determination, appears to have been very minimal. The situation is not expected to change significantly in the future.

This is evidenced by the news that the company has regained the top spot in its home smartphone market for the first time in four years. According to a recent report by market research firm Counterpoint Research, which was cited by media outlets including Pengpai Xinyuan(澎湃新闻) on July 7, the company reportedly became the No. 1 smartphone seller in the domestic market in the first two weeks of this year.

Until the second quarter of 2020, Huawei led in domestic sales and topped global smartphone sales. However, after becoming the target of U.S. restrictions on semiconductor exports, the company rapidly lost competitiveness and began to decline. However, Huawei did not succumb to the pressure from the U.S. On the contrary, it fought back strongly, trying to find a way out by developing its semiconductors.

Vigorously, Trump completely overturned the expectations of the U.S. and others. The company dramatically succeeded in developing a 7nm (nanometer) process semiconductor through the design of its subsidiary and the production of semiconductor company SIMC. Using this semiconductor, it launched its self-developed 5G smartphone, the “Mate 60 Pro,” in August last year.

As a result, it recorded a sales performance in the fourth quarter of last year that increased by 36.2% compared to the previous year in the domestic smartphone market. Raising the market share to 13.9%, it achieved fourth place in the industry. Riding on this momentum, it has regained the top spot in sales at the beginning of this year. Given the current explosive atmosphere of ‘patriotic consumption’ among the Chinese, it will likely continue to show its power by outpacing Apple and others for the time being.

Huawei’s power is also confirmed to be regaining strength in the global market. It is known to be recovering its former market share in the 5G telecommunications equipment (RAN) and smartphone markets using price competitiveness as a weapon. In particular, in the Indian market, it is said that it will threaten the status of Samsung and Apple in the long term, according to Chinese industry insiders.

With Huawei’s dramatic recovery and resurgence, it recently demonstrated a generous distribution to boost employee morale. Last year, it distributed 77 billion yuan ($12.2 billion) as bonuses to its 140,000 employees. According to Fengpai Xinwen, it is estimated to be 540,000 yuan per person. This was possible because over 100,000 employees held company shares.

It seems undeniable that Huawei’s winning streak will continue in the future.