Huawei’s revenue grew roughly 30% in the first half of 2019 after securing critical supplies ahead of the United States trade blacklisting, Bloomberg reported on Tuesday, citing people familiar with the matter.

Why it matters: Huawei’s revenue has not seen the full impact of US restrictions on technology exports to the Chinese telecom giant since the ban only took effect in mid-May. But Huawei may feel the pain if nothing changes after the 90-day suspension of the ban ends on August 19.

  • The revenue growth of 30% in the first half is a slowdown from 39% year on year in the first quarter, but is up sharply from 2018, said Bloomberg.
  • Huawei was granted a 90-day reprieve on the ban on May 21, which means it will lose access to its American suppliers after August 19.
  • Huawei founder and CEO Ren Zhengfei has said the US clampdown would wipe out the company’s production output by $30 billion over the next two years.

Details: In May, the US put Huawei and 70 of its affiliates on an “entity list” which forbids American companies from doing business with it without approval. The company said it has long been prepared for the “extreme scenario” that it could be banned from purchasing US chips and technology.

  • Huawei has awarded a number of employees who were responsible for stockpiling components ahead of the ban, identifying replacements for American parts, or negotiating with suppliers to keep up the flow of materials, said Bloomberg.
  • Huawei is now making adjustments to businesses most threatened by US sanctions, reassigning employees from the carrier and enterprise units to the faster-growing consumer division, said the report.
  • Huawei hasn’t confirmed the growth figure. The company said it would release official first-half results on July 30.

Context: Huawei is laying off more than 600 employees in its research arm Futurewei as it continues to struggle with the US restrictions.

  • The company said the layoffs were caused by the US restrictions. “Decisions like this are never easy to make. Futurewei will continue to operate in strict compliance with US local laws and regulations,” said the company in a statement.
  • Huawei, which reported revenue of RMB 721.2 billion (around $104 billion) last year, re-evaluated its revenue targets to around $100 billion this year and the next, according to Ren. It had initially forecasted revenue growth in 2019 of between $125 billion and $130 billion depending on foreign exchange fluctuations.

Writing about semiconductors and telecommunications.

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